Demobilization

In our earlier chapters, frequent and more or less extended references have been made to the disposition of surplus property acquired by the various branches of the Army during the World War. In so far as these references have been to surpluses with the American Expeditionary Forces, we have aimed to make the statements complete; but the references to sales of the surplus military property accumulated within the United States have been only incidental, inserted merely to make plain to the reader the extent of the tasks of the various production bureaus after the armistice. This may have seemed haphazard and confusing treatment of what was one of the most interesting and important phases of the demobilization of war industry. We are therefore taking occasion in this chapter to consider this phase—the disposal of the domestic surpluses of war materials—as a whole and in such detail as may be expedient.

That same tendency toward centralization which succeeded in placing under one direction the procurement of all war supplies and, after the armistice, the liquidation of the Government’s business engagements, also brought about a unified control of the sale of the surplus materials. Shortly after the armistice there was set up in the Division of Purchase, Storage, and Traffic a Sales Branch under an officer called the Director of Sales. Just as, after the formation of the “overhead” business organization known as the Division of Purchase, Storage, and Traffic, the various production bureaus still continued to procure most of their own supplies, but now under the control and authority of the Director of Purchase, Storage, and Traffic, so after the armistice these same bureaus sold and otherwise disposed of the surpluses they had acquired, but under the supervision of the Director of Sales. With the exception of a few sales made directly with various foreign governments and companies (property valued at $63,450,000 going in these transactions), the Sales Branch itself engaged in no selling, but merely directed the selling activities of the operating bureaus.

It is impossible here even to give an estimate of the value of the surplus materials left on the hands of the War Department after the termination of the war industry, for the reason that the War Department itself has never been able to arrive at an estimate. The subject has been so vast, so intricate, and so complicated by the changing of personnel and the evolution of organization, that it has seemed to be a hopeless task to attempt an inventory of the surplus property sold and for sale. We can, however, gain some idea of the quantities of it. It is estimated that the armistice found the Army with a surplus of war supplies on hand of a value of $2,000,000,000. This investment represented goods actually produced by American industry up to November 11, 1918, in the maintenance of a force of 4,000,000 men and in anticipation of a force of nearly 5,000,000 in 1919. But this, mind you, was surplus within the United States. On the same date—the day of the armistice—the A. E. F., through importations from the United States and through its own foreign purchases, had built up a surplus of supplies worth $1,330,000,000 over and above what it would return to the war reserves at home and outside of what it would consume while resting on European soil during demobilization. Thus we have the figure $3,330,000,000 as representing the value of the surplus supplies, munitions, on hand when the active fighting ceased.

But this is only the beginning of the complete inventory; this was merely the surplus existing on November 11, 1918. War industry, under the policy of terminating it by graduating a declining production, still had weeks and months to go on producing goods, for most of which there was no war use. This dwindling manufacture by thousands of factories with millions of employees added to the surpluses materials worth many hundreds of millions. And still the tale is not told. War industry had been fostered by huge federal investments in buildings and machinery. These facilities, too, existed as surplus when the industry ended. This great accumulation was largely augmented by the machinery and other manufacturing facilities taken over by the Government in the settlement with the war contractors. The Government had purchased heavily of raw materials of various sorts, quantities of which remained as surplus after the armistice. In liquidating the war industry it added further to its stores of raw materials and took over, besides, a great mass of semi-finished materials in all stages of completion. When upon this heap we pile a great part of all the war building construction, and on that the additional surpluses automatically created when polity in Congress and in the executive offices made cut after cut in the size of the permanent Army, then we are approximating the total of the surplus.

This was all wealth, the true substance of the nation, its resources fabricated by its labor for the special purposes of war; and, with the war over, with little or no demand or use for these special materials, they could be disposed of only at a shocking sacrifice. Again, we cannot estimate the extent of the shrinkage, but we can indicate it. Up to March 1, 1920, the War Department had disposed of surplus property which had cost it $2,600,000,000. For this it had received $1,633,000,000. The recovery, therefore, was 64 per cent of the cost; the loss, 36 per cent. The shrinkage in values is one of the wastes which any nation must contemplate and accept when it sets forth to wage war on the modern scale. The nation can get value received for the cost of its munitions only by using them in war.

The largest of American companies, the United States Steel Corporation, in 1918, its busiest year, did a gross business of $1,745,000,000. The value of the surplus munitions produced before the armistice was nearly twice as great as that. The Steel Corporation, however, produced only a few dozen or few score sorts of products. The sorts of goods and materials to be disposed of by the Sales Branch were in number about 250,000, and this range embraced goods known in many branches of trade. The Steel Corporation and other great companies usually sell to a relatively small group of customers, who take the products in wholesale quantities. The market which the Sales Branch entered consisted of the entire United States, with 110,000,000 possible buyers; for part of the problem was to dispose of surplus materials by retail sale to the public. All in all, this may be regarded as the greatest merchandizing enterprise ever undertaken in America.

The 250,000 catalogue items in the sales list were divided roughly into seven commodity groups, as follows: (1) railway and building materials and contractors’ equipment; (2) manufacturing plants and plant sites; (3) machine tools; (4) vehicles and airplanes, including spare engines and parts; (5) quartermaster stores; (6) ordnance and technical equipment, including office equipment; and (7) raw materials, scrap metal, and waste materials.

It was recognized at the outset that to throw on the market vast quantities of supplies and materials in all these seven categories was to court disaster to the industrial situation. Business and industry immediately after the armistice were in a ticklish position. They faced the complete transition from the war to the peace basis, an uncharted region through which it seemed likely that they could go safely only under the wisest of guidance. If, in addition to its inevitable troubles of reconstruction, industry were to have to face cutthroat competition with the surpluses of the very goods its own mills had created during the war, it was evident that the difficulties of the transition might be doubled.

To safeguard business as much as possible and still dispose of the surplus materials, the War Department adopted certain general principles or policies. The first of these was that the general Government, through its several departments and in the public work which the departments were doing, should utilize all the surplus war materials they could absorb. The second and more important was to sell all general commodities to the public through the medium of the industries which had produced these commodities and thus to avoid disastrous breaks in market prices—even, sometimes, to sustain prices.

There was widespread disapproval of this latter policy. The public for months had been stung and irritated by prices which many regarded as the exactions of profiteers; and now at last, with huge stocks of supplies on hand which had to be sold or lost, the people anticipated a dumping which would smash down prices and bring about the discomfiture of those who had seemingly victimized them. But this was not to be. The Government adopted the view that it was better to have the high (but normally declining) prices and to keep the wheels of industry turning than to risk a collapse of prices that might bring with it general unemployment and business stagnation.

Later on, when it had become evident that business was making a safe passage through the reconstruction period, large stocks of clothing and food supplies were sold directly to consumers at prices considerably below the market averages.

Particularly in raw materials the policy of sale through, or in coöperation with, the industry affected by the sale worked as the Government had expected it to work. The War Department found itself after the armistice with a surplus of 125,000,000 board feet of soft lumber over and above what it would need in completing the various unterminated construction projects. This was lumber enough to build 5,000 houses. To have dumped this on the market would have paralyzed a large part of the lumbering industry until the market had absorbed the army lumber. Accordingly the War Department entered into a contract with the authorized representatives of the lumber industry whereby it was agreed that the lumber should be marketed gradually and at prices fixed by agreement between the Government and the industry. Under this arrangement the surplus was all sold without disturbance to the industry and at prices which brought a good return to the Government.

In the spring of 1919 the Government had on hand a surplus of something more than 100,000,000 pounds of copper. The copper industry was in a serious plight. The producers had on hand a surplus of 1,000,000,000 pounds, but still they were keeping the mines, smelters, and refineries running to prevent unemployment and in the expectation that the resumption of normal business would soon create a demand for copper. Any dumping of the war department surplus most certainly would have closed the mines. Instead of that, the Government sold the entire surplus back to the producers. The industry continued in operation, and the Government received an average of seventeen cents a pound for its copper, a fair recovery.

The War Department’s surplus of 161,000,000 pounds of sulphur was sold through the industry. At the armistice the Government had on hand some 600,000 tons of nitrate of soda imported from Chile for the powder factories. About half of this was retained as a war reserve. The Department of Agriculture disposed of 125,000 tons of it to farmers for use as fertilizer. About 142,000 tons was sold for the War Department at market prices by the nitrate importers who had supplied the commodity to the Government in the first place. A stock of 59,000 tons of nitrate in Chile, the property of the American Government, was brought to the United States and sold by the importers on the same terms. Approximately 730,000 bales of cotton linters in the war department surplus are being used by the commercial powder industry on such terms as will return to the Government from one-third to one-half the original cost of the linters. A surplus of 66,000,000 pounds of ammonium nitrate was sold at prices which reimbursed the War Department to the extent of about one-third its war-time cost.

It should be borne in mind that all these sales were actually consummated by the production bureaus in whose hands the supplies remained as surplus after the armistice, the Sales Branch merely coördinating the sales and approving the terms. It will be impracticable here to go into the details of the salvage and sales activities of all the bureaus, but enough can be told to illustrate the ingenuity and business enterprise employed in disposing of the great war surpluses. As the occasion demanded, the government salesmen had to be merchants, barterers, auctioneers, and even partners with commercial organizations.

The production bureaus were organized for their salvage operations precisely as they had been for manufacturing the supplies and, later, for liquidating the business arrangements with the contractors. Those which had created manufacturing districts before the armistice, afterwards established district salvage boards to take over and dispose of the surpluses accumulated by the district claims boards in their settlements with the contractors. These district salvage boards, in turn, were subsidiary to the main bureau salvage boards, which, in turn, reported to the Sales Branch of the Division of Purchase, Storage, and Traffic. The surpluses of ordnance materials, for instance, were handled by the Ordnance Salvage Board through its district salvage boards, and the same system obtained in the Air Service and under the Director of Purchase. The other bureaus disposed of their surpluses through central salvage boards in Washington.

Perhaps the chief challenge to the ingenuity of the government salesman was that offered by the ordnance surpluses, for these were probably the most highly specialized of all military supplies; yet it was often the task of the Ordnance Salvage Board to find civilian needs to which these supplies could be adapted. Great commercial successes have sometimes been scored by those able to develop new uses, and therefore new markets, for the goods they manufactured. In like fashion the ordnance salvers, by taking thought, could sometimes convert what had been regarded as junk into merchandise for which there was a brisk demand at good prices.

These activities took the salesmen far afield. They disposed of lumber to the Panama Canal operators, sold nitrate to the Government of Holland, converted the great ammonium nitrate plant at Perryville into a hospital operated by the Public Health Service for the benefit of disabled ex-service men, transferred tin to the Navy Department, and demonstrated to the Department of Agriculture that the containers in which it had been intended to ship trench mortar shell could serve equally well as containers of dehydrated vegetables. They disposed of rope to the Department of Agriculture. They sold a thousand revolvers to the police force of Washington. To the federal road-builders they turned over trucks and smokeless powder and trinitrotoluol to be used as blasting explosive.

One of the largest single undertakings in ordnance salvage was the disposal of manufacturing plants either built outright or equipped with machinery by the Government. There were some 300 of these, and the Government’s investment in them was practically $525,000,000. The array included cannon and gun-carriage plants, shell-loading plants, powder works, chemical and acid plants, toluol plants, small-arms factories, ammunition factories, nitrate-fixation plants, and numerous shell-making plants. In the liquidation of the ordnance industry large additional quantities of ordnance production machinery, both new and used, fell into the hands of the Government. All of it, beyond the selections retained in the military reserves, had to be sold. During the first year after the armistice the sales of ordnance plants and machinery brought in a return of over $70,000,000. (Manufacturing facilities worth double that amount had either been stored or installed at the various arsenals, or else had been turned over to other departments of the Government.) In the spring of 1920 half the vast accumulation of ordnance plants and machinery had been disposed of.

The most spectacular sale accomplished in this branch of ordnance salvage was that of the smokeless powder plant at Nitro, West Virginia. This plant was a self-contained town, with three square miles of land in its site, with houses for 20,000 people, theatres, schools, churches, stores, electric lights, paved streets, gas, a telephone system, water, and other modern improvements. The Director of Sales himself conducted the negotiations whereby the entire establishment was sold en bloc to a development corporation, which planned to resell the establishment piecemeal to manufacturers and thus create a permanent industrial city at Nitro. The corporation paid a flat price to the Government for the Nitro plant and in addition admitted the Government as a partner in the profits. Several companies have already occupied factory buildings there. The Ordnance Salvage Board maintained representatives at Nitro to approve the resales as they were made.

The Ordnance Department took over from the producers after the armistice large quantities of steel in process of being made into artillery shell. A great deal of this steel consisted of finished and semi-finished parts for shell. No matter how much labor had been expended on these shell parts, their only value commercially was as melting stock. The users of steel evidently expected to be able to pick up the Government’s surplus stock of it after the armistice for a song: the highest bids for the first offerings of it on the market were only about $12 a ton. The ordnance salvers cannily decided not to sell at such prices and, except for some trifling, but advantageous, sales, did nothing about it until the summer of 1919. By that time the commercial revival began to make itself felt in the demand for steel, the prices of which were further enhanced by an impending strike in the steel industry. Then it was that the wisdom of holding on to the steel stocks became evident. The sale of shell steel was handled directly by the Ordnance Salvage Board, which, after the prices rose, dealt only with heavy purchasers. The average price paid to the Government for this steel was about $30 a ton. The Salvage Board handled about 1,000,000 tons of it.

There were also large surpluses of nonferrous metals,—copper, zinc, lead, tin, antimony, and nickel,—the stocks including nearly 20,000 ounces of platinum, which sold, it may be noted, for an average price of $105 an ounce—just about what it had cost. The copper, as we have seen, went back to the producers at a fair price. The Board sold 65,000,000 pounds of zinc at an average of eight cents a pound. The surplus of brass amounted to 135,000,000 pounds, and this has been selling at good prices. During the year following the armistice the salvers disposed of nonferrous metals worth $40,000,000.

The salvers had to use their ingenuity in order to dispose of the surplus cupro-nickel advantageously. Cupro-nickel is an alloy of copper and nickel which is used in making jackets for small-arms bullets, but the metal has no commercial use. The Government was able to secure not a single bid for any of its large surplus of cupro-nickel. The alloy is too tough for ordinary metal-working machinery. The ordnance salvers first proposed that this metal be used at the Mint in making five-cent pieces, but the surplus of it was so large that it would have taken many years to consume it all in this use. The experimenters then took hold and found that, by melting cupro-nickel and further alloying it with zinc, they could produce German silver, a commodity for which there is extensive industrial use. This fact was demonstrated to the market, and the first result was a bid for 5,000,000 pounds of cupro-nickel at a favorable price.

An even more conspicuous example of resourcefulness on the part of the ordnance salvage forces was the sale of the so-called cartridge cloth. The Ordnance Department was an extensive war consumer of textiles of many kinds. Silk, cotton, wool, felt, and linen are used in numerous forms in the production of ordnance supplies. The quantities acquired during the war may be estimated from the fact that the surpluses left after the armistice brought on sale close to $25,000,000. In the surplus of textile goods was a considerable yardage of what was called cartridge cloth; and it must be said that at the outset none of the excess ordnance supplies seemed to be so hopeless as a salvaging proposition, so certain to account for a large loss of investment, as this stock of cartridge cloth.

The cartridge cloth was used during the war to make bags to be filled with the smokeless powder used as the propelling charges for guns of the larger calibers. The cloth was made of silk, for the reason that silk alone among fabrics burns perfectly and leaves no ash to smut the barrel of a gun. Cotton, in contrast, or any other fabric, is likely to leave charred pieces of itself smouldering in the breech of a gun after a shot; and these smouldering pieces may touch off the new powder charge prematurely and kill or maim the men serving the gun. Moreover, silk alone does not cause a flash at the muzzle of the gun when the shot is fired. Such flashes at night betray the gun’s position to the enemy.

But though cartridge cloth was made of pure silk, what a silk it was! Naturally, to keep down its cost, it was woven of the cheapest silk materials possible to obtain. It was made of what were practically the by-products of silk-weaving—noils and waste silk. Noils are cut cocoons, immature cocoons, and combings from the outsides of cocoons. The woof of cartridge cloth was made from silk noils and the warp from waste silk. All raw silk is filled with a natural gum, which in commercial processes is boiled out before the silk is woven. Since this gum did not impair the fabric for use in guns (the gum gave perfect combustion and left no ash), it was left in the raw material in order to keep down the cost of the fabric. In order to facilitate the manufacture of cloth from noils, the noils were carded, combed, and spun in oil, oil not being objectionable in the cloth. The result was a greasy, dark colored, rough cloth, looking like oily gunny sacking, a fabric about as unalluring as any that could be imagined. And it cost the Government on the average seventy-two cents a yard. At the time of the armistice the Ordnance Department had on hand about 22,000,000 yards of it. Most of this quantity was set aside as a war reserve. The rest was offered for sale. The best offer for it was twelve and one-half cents a yard. The Government, therefore, faced a considerable loss.

The ordnance salvers were not content to swallow this loss. The Salvage Board obtained $20,000 with which to experiment with the silk. An expert silk maker in the Sales Branch then tried boiling out the gum and oil and otherwise processing the fabric, after which he bleached, dyed, printed, and napped it. The result was a beautiful fabric, suitable for outer garments for both men and women, and for millinery, drapery, and upholstery. Beautiful color effects were obtained with it by certain silk-finishing companies. With this demonstration before the trade, the Salvage Board again asked for bids, and this time received a number of them, offering prices ranging from thirty-one cents a yard to forty. This still was not enough for the salvage salesmen, who went out and negotiated a contract with two companies—the Bush Terminal Company of New York and the McLane Silk Company of Turners Falls, Massachusetts—which netted the Government eighty-five and a half cents a yard, plus half the profits received from the sale of the fabric. A considerable quantity of the silk was sold under this arrangement.

The expenses of the Ordnance Salvage Board were less than 6 per cent of the money received from sales and transfers. This sales cost compares favorably with similar costs in the mercantile world.

The fact that a large part of the money spent by the Air Service during the war was represented after the armistice by finished airplanes and airplane engines precluded any considerable recoupment of the war expenditures from sales of surplus materials afterwards, since, at present, planes and engines have small commercial utility. Aviation engines are too light and too powerful for ordinary tasks, and no real market for airplanes has yet existed in the United States. Consequently, the sales of air service surplus were virtually limited to commodities having commercial use, such as tires, photographic equipment, linen fabric, fur used in making aviators’ clothing, and the like. Some of these surplus commodities, however, went at good prices. One New York concern bought 372,500 Chinese dogskins for approximately $700,000. Nearly 5,000,000 board feet of surplus mahogany, used in making propellers, sold for $150 a thousand feet. Great quantities of small tools from the airplane factories, millions of yards of cotton fabric, and nearly 4,000,000 pounds of long-staple cotton sold at good prices. The Government realized $700,000 from the sale of 20,000,000 feet of spruce, fir, and other soft woods used in the manufacture of airplanes. One large sale of airplanes and engines was recorded. For $380,000 the Nebraska Aircraft Corporation of Lincoln, Nebraska, bought 280 Standard J-1 training planes without engines and 280 Hispano-Suiza engines to drive them.

To sell its surplus in the United States the Air Service set up field disposal agencies at Boston, New York, Buffalo, Chicago, Detroit, and Dayton. The property declared surplus was valued at approximately $115,000,000. Up to the present (July, 1921) goods to the value of $97,000,000 have been sold from this surplus, and there is an unsold residue valued at $18,000,000. The average recovery has been 62 per cent of the cost.

The disposition of the property acquired by the United States Spruce Production Corporation in the forests of the Pacific Northwest was delayed by the congressional investigation of the affairs of that official organization. The cost value of all salvageable property was calculated at approximately $19,000,000, of which $7,000,000 represented the cost of three railroads for hauling logs. The rest of the investment was represented by sawmills, roads, hotels and barracks for woodsmen, hoisting engines, drying kilns, and nearly 100,000 other items, among which were 22,000,000 feet of lumber produced and on hand. The lumber of commercial grades was promptly sold, and the Air Service arranged to take over the 3,088,000 feet of airplane lumber stock, for a consideration of approximately $1,000,000. The sale of the remaining property has gone on slowly, and the recovery has been low in ratio to the original cost.

The sale of surplus engineering materials brought to the Government the unusually high average recoupment of 87 per cent of the cost of manufacturing the supplies. The reason is that the largest and most valuable part of the surplus consisted of railroad construction materials and rolling stock. The railroads of the world, and particularly those of Europe, had been neglected during the war, and their rejuvenation had become a necessity even paramount to that of reconstructing general industry. Such governments as those of France and Poland were glad of the chance to secure American locomotives, cars, and cranes at the cost of their manufacture. The largest single sale of engineer supplies was made to the French Government, which paid approximately $63,000,000 for 485 freight locomotives and nearly 20,000 freight cars. By the spring of 1920 surplus engineering supplies which had cost $128,000,000 had been sold for about $110,000,000. Large quantities of excavating machinery and other contractors’ equipment were transferred to the Bureau of Public Roads.

Surplus chemical warfare materials, on the other hand, proved to have low salvage value. After the armistice the Chemical Warfare Service found itself with some 1,000 carloads of surplus materials on its hands. These materials had cost $11,000,000. Of the surplus, obsolete gas masks and other accumulations valuable to no one and therefore unsalable, accounted for $2,000,000. The rest consisted principally of raw materials and machinery. Certain of its raw chemicals the Service was able to dispose of to the artificial dye industry at a profit. The outside gas-making plants attached to the Edgewood Arsenal were sold by auction to manufacturers of chemicals.

Though the sales of surplus factories, machinery, raw materials, and scrap and junk were of intense interest and concern to industry and business generally, the great masses of people in this country knew little or nothing about them. The wage earners, the millions drawing salaries of moderate range, were not beneficiaries—not immediate beneficiaries, at any rate—of the bargains the Government was offering. The trade journals were filled with advertising and reading matter about the sales of the war surpluses, but the newspapers seldom had anything to say about them. No doubt there were hundreds of thousands of Americans who, immediately after the armistice, reading about the excess stores which were overflowing the Government’s enormous warehouses, expected to benefit personally and at once by the situation. It was the opportunity of a lifetime to pick up a new stock of kitchen utensils for a song, or a lawn mower, or a new Dodge car at a knock-down price, or, at least, new supplies of underclothing and other garments, or of food at figures which would make the corner grocer squirm. But as the weeks and months went by and none of these opportunities ever presented themselves, it became obvious to any thinking person that the Government itself must be in league with the profiteers and must be holding out its stocks in order to let the gouging go on without hindrance.

Those who jumped to such a conclusion were not aware of the restrictions which their own representatives, the men in Congress, had thrown about the sale of government property. Just as the law forbade (with certain exceptions and qualifications already noted in this volume) the government executives to buy supplies except from the best bidder in a competition for the business, so it forbade them to sell supplies except to the best bidder. The buyers therefore had to compete with each other for the surplus stocks, either in auction sales or by sealed bids submitted after goods had been duly described and advertised. And since the Government had its own sales expenses to consider and therefore could not hold auctions to dispose of single cans of tomatoes or advertise for bids for individual hams, the ultimate consumer, unless he were prepared to purchase by the carload, was as much out of it as if the supplies were stored on the moon.

Not until July 29, 1919, did Congress come to the relief of the ultimate consumer by passing an act authorizing the War Department to sell food, clothing, and household supplies at retail. Within ten days the Surplus Property Division (of the Division of Purchase, Storage, and Traffic, which had charge of all food, clothing, and general supplies) inaugurated a plan of direct selling by parcel post. Price lists and order blanks were sent to the 58,000 post offices of the United States, and the postmasters were instructed to receive orders and cash and send consolidated requisitions and payments to the Surplus Property Division. This plan was not a success, thanks principally to the postmasters’ unfamiliarity with such work; and a few weeks later it was abandoned altogether in favor of the army retail stores. Through these stores the masses of consumers at last came into direct touch with the surplus war supplies.

The store system was established on September 25, 1919. At the stores a consumer might buy food and other supplies over the counter in such quantities as he chose; or, if he lived too far away to visit the store, he might order from it goods to be delivered by parcel post, postage prepaid and goods insured at government expense. At first the Army established twenty-five stores, and these did so well that additional stores and branches were added, until by the late winter of 1919–1920 there were seventy-seven places where consumers might go and buy, at reduced prices, the goods which their tax payments and bond purchases had enabled the Government to procure. The stores were operated under the supervision of the fourteen zone supply officers.

In selling directly to the consumer, the War Department adopted the policy of pricing goods at four-fifths of the prevalent retail market prices. Since the cost of living had begun to decline in late 1919 and the early part of 1920, this policy meant a loss to the Government, which had paid war prices for the supplies; but it was not a large loss. On the average, the retail sales brought back nearly 80 per cent of the original cost of the goods sold. The sales expenses came to about 10 per cent of the money received.

The War Department did everything in its power to make the stores attractive to the public. It stocked them with a wide range of articles and advertised them heavily. A press bureau was established in Washington, and the newspapers devoted acres of space to the publicity. In spite of the propaganda, however, the response of the public was not so unrestrained as the outcry against the costs of necessaries might have led one to expect. (To be sure, the Government, naturally, could not set up its stores in the high-rent districts—the districts most convenient to the retail customers.) The army retail stores did business at the rate of approximately $5,000,000 a month—not much for 110,000,000 potential customers. As the sales went on it became evident that, although the protest against high prices was practically universal, only the thrifty minority was willing to step across the line of convenience and custom in order to secure lower ones. The rest preferred to grumble and follow their lines of least resistance.

Yet it is probably true that the retail stores benefited all, since the continued sale of great quantities of surplus military supplies at reduced prices doubtless had an effect in bringing down commercial prices. Although only some 350 items in the Army’s supply list were applicable to retail selling, this range, after all, was considerable. In the subsistence list it ran from Apples, Evaporated, to Vinegar, and in general supplies from Arctics, Cloth Top, to Whips, Artillery. The Surplus Property Division even sold a few motorcycles at the stores.

Far overshadowing the retail sales in quantities of goods moved were the sales to jobbers, dealers, and speculators, by informal bids on advertised lists of supplies. The sales headquarters in Washington and the zone offices became busy markets for months after the armistice as the War Department got rid of the surplus supplies procured by the Director of Purchase. As stated, there were regular commodity days—textiles were sold on Mondays, raw materials on Tuesdays, and so on. At the Monday sales the Surplus Property Division had taken in, by February 20, 1920, nearly $66,000,000 paid for clothing and equipage alone. These sales benefited the general public in that they usually resulted in the goods being sold at retail by salvage companies or by regular mercantile houses at reduced prices.

The fluctuations of markets sometimes made it possible for the Government to sell surplus to bidders at a profit. For instance, a ton or more of camphor, acquired originally for the Medical Department, brought a profit of 84 per cent, due to a post-armistice increase in the price of camphor. Medical supplies generally, although they were sold principally to public institutions, brought a 99-per-cent recovery of their war cost. General supplies—including hardware, kitchen utensils, brushes and brooms, rope, paper, office furniture, musical instruments, and athletic goods—sold at prices which brought back to the Government more than 72 per cent of their war cost.

Apparently useless supplies—useless to civilians, that is—were purchased by bidders who had found unique uses for them. The nonbreakable eyepieces of gas masks were found to manufacture well into motorists’ goggles. The anti-dim paste used to keep the gas-mask eyepieces from fogging from the wearers’ breath had a practical use upon the windshields of automobiles during rainstorms. Trench fans were bought and used as aprons for cannery workers.

Surplus leather was sold in auctions held in Philadelphia, Chicago, San Francisco, Boston, and elsewhere; and the cash recoveries generally were large, ranging from 71 per cent to 100 per cent of the war cost, and even, in instances, returning a profit. Harness did not sell well, because much of it was made of russet leather, which does not attract the commercial buyer, or else because the harnesses were of special designs not used by teamsters.

The demands of other departments of the Government for surplus army motor trucks were so great that only a few were sold as surplus, and those few were neither new nor in good condition. Automobile tires, however, were placed on sale in the retail stores.

The total sale of surplus materials acquired by the Division of Purchase, Storage, and Traffic amounted to $357,000,000 between the date of the armistice and January 31, 1920. The recovery was 77.57 per cent of the original cost.