Financing the War: Bonds, Taxes, and Economic Control

1. A. The Expense and Financing the War 1. nation spent approximately $112 billion for war 2. Sec. of Treasury William McAdoo methods of financing a. associated bonds with patriotism & glamour b. also planed to raise taxes i. passed War Revenue Act of 1917 a. boosted tax rate on profits & estates ii. raised highest income tax to 7% from 6% B. Controlling the Economy for the War effort 1. Wilson created the Food Administration a. Herbert Hoover a young engineer headed i. was Commission for relief of Belgium b. campaign to provide food for allied forces i. wheatless Mondays & Wednesdays XV. OVER HERE

2. ii. Meatless Thursdays, Porkless Saturdays c. set farm prices artificially high i. tried to encourage production ii. guaranteed farmers a minimum price iii. overall farm income rose 30% iv. domestic food consumption drops v. food exports more than tripled 2. Wilson created the War Industries Board a. Bernard Baruch head a wall street broker headed b. build Hog Island shipyard near Philadelphia i. largest shipyard in the U.S. ii. could not build ships fast enough to effect war 3. 12/1917 established the United Railway Administration a. put $500 million into improvements & equipment b. businessmen complained about nationalization

3. c. railroads ran better 4. National War Labor Board a. controlled government contracts b. take over in interests of national good c. enforce wages and hours issues d. stops exploitation of women & children e. kept labor in line with threat of draft or nationalization C. Women and Minorities make headway in opportunities 1. large labor shortage in U.S. 2. Great Migration a. numbers of Blacks leave south for work b. 1917 south hit by boll weevil infestation c. cotton prices drop & white repression extreme d. Labor agents from large industry start recruiting Blacks 3. Most Blacks remain in south after Civil War 12

4. a. believe conditions will eventually improve b. by 1900 most believed conditions hopeless c. some resistance from whites in south to loosing labor d. a few whites in north & west resisted 4. Women benefited tremendously from new job openings a. Secretaries, salespersons, operators b. Suffrage movement gained strength i. 1916 National Woman's Party starts ii. Alice Paul Quaker from N.J. radical iii. marched on White House a. picketed and chained to gates b. 200 arrested by White house guard and police c. Wilson needed support of women could not alienate d. 1920, 36 states ratified 19th amendment 13

5. D. Politics of the Peace Treaty 1. Germany signed armistice in hope of equitable peace 2. Wilson hoped for same but allies wanted revenge 3. January 1919 Wilson proposes 14 points a. open covenants, freedom of high seas, equal trade b. self-determination & a League of Nations b. plan was idealistic and naive 4. Delegates reshaped Europe a. Austro-Hungary is Austria, Hungary & Yugoslavia b. New states of Poland & Czechoslovakia c. Finland, Estonia, Latvia & Lithuania taken from Russia c. France gained industrial Saar region of Germany i. In 15 yrs. a plebiscite taken for self-determination 14

6. d. Italy gained port city of Trieste e. Germany forced to pay $56 billion & admit guilt f. France & Britain get German claims in Middle East g. Japan took the German colonies in the Pacific h. League of Nations gets Germany’s African colonies 5. League of Nations becomes model for United Nations a. council of 5 great powers (security council) b. elected delegates from smaller countries c. World Court settles disputes 15

7. 6. Problems with the Treaty of Versailles that ended the war a. smaller nations not invited & resented decisions b. Germany could not pay reparations & felt betrayed c. Wilson brought experts but no Republicans i. Senate had large Republican majority ii. Republican leadership rejects role in League of Nation iii. Wilson seeks support from American people a. has stroke in Pueblo, Colorado Sept. 25, 1919 b. First lady ran country in name of the President