The chaotic procurement eventually led to inflation. Part of the price rise resulted from the influx of European gold in the first years of war. But American entry in 1917 exacerbated matters. Government propaganda encouraged Americans to borrow from banks and buy Liberty Bonds that would help fund the war. The newly created Federal Reserve flooded the banking system with liquidity (in essence printed money) to make sure banks could accommodate the demand. The expansion of the money supply had predictable results: retail prices rose 17 percent in 1916, another 17 percent the next year, and an additional 15 percent in 1918. Wilson did not attempt to impose price controls, using exhortation and patriotic appeals to encourage “fair prices” instead.27 But prices kept rising because borrowing kept going. All together the war cost about $33 billion: new taxes generated $11 billion of that; borrowing covered the remaining $22 billion.28
The combination of poor coordination, haphazard purchasing, and industrial foot-dragging meant that the American economy saw almost no real economic growth between 1914 and 1920 despite the massive demand created by the war. Inflation made it appear as if the economy had doubled in size; once adjusted for inflation, that growth disappeared.
Wilson’s main effort to coordinate the wartime economy came in the creation of the War Industries Board (WIB); unfortunately, the board existed as a “clearinghouse for the self-regulation of business” rather than an agency with command-and-control powers.29 Predictably, it was ignored. Matters did not improve much until March 1918, when Wilson elevated the charismatic Bernard Baruch to be chairman of the WIB. While the WIB still struggled to control industry, it at least succeeded in launching the public career of Bernard Baruch. Already known as a genius financier, his staunch Democratic credentials—and his campaign contributions—made him a logical choice when Wilson sought a figure to run the War Industries Board. From this point forward he remained in public life, advising presidents through depression and later wars.30
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Figure 2. U.S. real and nominal growth of GNP in World War I, 1914–1920. Source: Historical Statistics of the United States: Colonial Times to 1970, Bicentennial Edition, Part 1 (Washington, DC: Department of Commerce), Series F 1–5. Gross National Product, Total and Per Capita, in Current and 1958 Prices: 1869 to 1970, 224.
“If not depressed, I was mad, disappointed, and resented the fact that the war had passed me by.” Eisenhower had managed to find the dark lining in the silver cloud of world peace. The war had ended and, from his perspective, so had his chance to fight: he was “putting on weight in a meaningless chair-bound assignment, shuffling papers and filling out forms.”31
Eisenhower’s anxieties about missing the war mirrored the army’s sense of drift in the postwar period. “Where-oh-where was that welcome they told us of?” MacArthur wrote to a friend after finally arriving home in the spring of 1919. “Where were those bright eyes, slim ankles that had been kidding us in our dreams? Nothing—nothing like that.”32 Once again, no sooner had the fighting stopped, than many Americans moved to put the war behind them. Indeed, a kind of antiwar fervor spread through the country, questioning the “real” motives for war.33 Army leaders had hoped the war had finally made the military an acceptable part of American society. They put forward proposals for enacting universal military service, only to realize how out of step they were. Congress responded with the National Defense Act (June 1920), which cut the army back to 280,000 men (it would be cut further to 125,000 in 1923). A future war would, Congress declared, require the same kind of sudden conscription that had marked preceding wars.
Daniel Read Anthony (R-KS), chair of the House War Department Subcommittee, hoped to reduce federal expenditures to as close to zero as possible. Specifically, he looked for “possibilities of cutting down the future development of tank, airplane and similar expensive units” for future savings.34 He helped send the newly formed tank corps to oblivion by subsuming it under a jealous infantry determined to keep this new weapon outside of the American arsenal. Other countries would quickly jump past the United States in understanding and utilizing this critical new weapon.35 “The peacetime Army was poor,” recalled Clay. “It had no vehicles, no equipment.… I can remember when we didn’t have our target practice for the entire year simply because we didn’t have ammunition.” In its place, the army had “only a certain sincerity, particularly among the younger officers, who had been the junior officers of World War I and who knew how badly we did … and who dedicated themselves to building a better Army.”36
With no money and little congressional support, individual army leaders nevertheless looked to institutionalize the lessons from the world war. Often they would concede budget cuts if they came along with organizational reforms streamlining the army’s command structure. Out of this came the Army Industrial College, a center to train army leaders in the economics of war (the college opened its doors in 1923).37
Less formally, those officers who remained in service looked for ways to improve themselves. “This was one of the reasons why the [West Point] Class of 1915 achieved such an outstanding World War II record,” observed Clay years later. “They were the ones who came back from World War I thoroughly convinced that we had to be more professional, and they really introduced a spirit of professionalism into the armed services. We were amateurs in World War I. We were professionals in World War II.”38
Despite missing combat, Eisenhower decided to do what he could to anticipate a future war, and, despite congressional cuts, he sincerely believed that tanks would be crucial. In this he found a lifelong friend and partner, George Patton. “From the beginning,” Eisenhower commented later, “he and I got along famously.”39 The two men concluded that tanks could fundamentally redefine battlefield tactics. If bunched together, they could punch through enemy lines and create havoc from the rear, making trench warfare obsolete. If combined with air support, they could deliver decisive blows and race across open territory. Excited by their insights, Eisenhower and Patton submitted articles in separate military journals.
Eisenhower’s contribution, “A Tank Discussion,” appeared in the latter half of 1920.40 Unfortunately, along with extolling tank warfare, it took a swipe at Congress and the infantry for shelving research into the new weapon.41 As reward for his insight, the chief of the infantry told Eisenhower that his “ideas were not only wrong but dangerous” and that he should “not publish anything incompatible with solid infantry doctrine.” If he did, he “would be hauled before a court-martial.”42 (In the meantime, German officers began experimenting with tanks and came to roughly the same conclusion, leading to the idea of blitzkrieg launched with devastating effect in World War II.)43
Implicit in Eisenhower’s strategic vision, however, lay a basic economic reality. Military success depended upon economic might and technological innovation. Future wars would turn on domestic production at least as much as tactical cunning or courage. Thus, already in the 1920s he understood the “tendencies toward mechanization, and the acute dependence of all elements of military life upon the industrial capacity of the nation,” and that led him to learn more about the way industry worked. “Large-scale motorization and mechanization and the development of air forces in unprecedented strength would characterize successful military forces of the future.”44
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At the end of World War I, French military leaders found an opportunity to accomplish something they had sought for years: control of the left bank of the Rhine River. The river provided a natural and formidable barrier to invasion, and