USA > Indiana > The war purse of Indiana; the five liberty loans and war savings and thrift campaigns in Indiana during the world war > Part 1
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INDIANA COLLECTION
CEN
10. 1
ALLEN COUNTY PUBLIC LIBRARY
3 1833 02370 1862 1 Gc 977.2 G85w Greenough, Walter Sidney The war purse of Indiana
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Martin Breenough
December 4 1922
Indiana Historical Collections
Copyright, 1922 By The Indiana Historical Commission
INDIANAPOLIS: WM. B. BURFORD, CONTRACTOR FOR STATE PRINTING AND BINDING
1922
INDIANA WORLD WAR RECORDS Volume II
The War Purse of Indiana
The Five Liberty Loans
and
War Savings and Thrift Campaigns in Indiana During the World War
By WALTER GREENOUGH
Published by the INDIANA HISTORICAL COMMISSION Indianapolis
1922
Allen County Public Library 900 Webster Street 1 PO Box 2270 Fort Wayne, IN 46801-2270
INDIANA HISTORICAL COMMISSION
DR. FRANK B. WYNN, President SAMUEL M. FOSTER, Vice-President HARLOW LINDLEY, Secretary
Gov. WARREN T. MCCRAY JAMES A. WOODBURN CHARLES W. MOORES MATTHEW J. WALSH MRS. JOHN N. CAREY LEW M. O'BANNON
JOHN W. OLIVER, PH.D., Director LUCY M. ELLIOTT, Assistant Director
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CONTENTS
Page
Chapter I. Indiana's Financial Awakening
13
Chapter
II. First Liberty Loan in Indiana . 18
Chapter
III. Second Liberty Loan in Indiana
42
Chapter IV. Third Liberty Loan in Indiana
73
Chapter V. Fourth Liberty Loan in Indiana 108
Chapter VI. Victory Loan in Indiana. 145
Chapter VII. Indiana Women in the Loan Campaigns 181
Chapter VIII. War Savings Campaigns. 200
APPENDIX
Page
Cost of War to United States
236
Liberty Bonds and Victory Notes
243
Certificates of Indebtedness. 247
Chronology of The Federal Reserve Bank of Chicago
250
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ILLUSTRATIONS
Page
1. Poster, First Liberty Loan.
18
2. Poster, Second Liberty Loan 42
3. Poster, Third Liberty Loan . 72
4. Poster, Fourth Liberty Loan 108
5. Poster, Victory Loan. 145
6. Poster Used In Woman's Loan Campaign 180
7. War Savings Stamp Poster 199
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EDITOR'S INTRODUCTION
This is the second volume of the series "Indiana In The World War", published by the Indiana Historical Commis- sion. In this volume will be found a comprehensive study of the organizations and groups of individuals in Indiana that helped in the work of financing the World War.
As a student of financial problems, and as a writer on finan- cial and economic subjects, Mr. Greenough is well qualified to discuss the issues that developed in connection with the Liberty Loan drives and the War Savings campaigns. He served throughout the war as Director of Publicity in the State Liberty Loan Headquarters in Indianapolis. In this position he had opportunity to keep in direct touch with the workings of the Liberty Loan organizations. Also he was in position to make a careful survey of the numerous problems that confronted the Liberty Loan committees, and to study the development of that war spirit that dominated the lives of In- dianans during those two epoch-making years in our state history.
JOHN W. OLIVER, Director Indiana Historical Commission
May 31, 1922 State House, Indianapolis
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AUTHOR'S PREFACE
It is with a sense of grave responsibility that the writing of "The War Purse of Indiana" has been undertaken. Wars and the people waging them are abnormal. They create new organizations and they break down old ones. And in such times of stress little thought is given to records.
The sources at hand for writing this volume, while volu- minous, have been neither definite nor accurate in many in- stances. While the records used have been source material, many of them have been conflicting and contradictory. Reconcilement has been perhaps the hardest task of all, for the data herein has been compiled not only from such official sources as the complete files of correspondence, telegrams and bulletins from Liberty Loan and War Savings Headquarters in Indianapolis, Evansville, South Bend, Chicago, St. Louis and Washington, D. C., but from the newspapers of Indianapolis, Evansville, Fort Wayne, South Bend, and other Indiana towns and cities. Much correspondence of an interrogatory nature has been carried on with various county chairmen and others since the close of the war in an effort to assemble all possible material bearing on the subject. United States Treasury re- ports, Federal Reserve Bank reports and original material, prepared by many leaders in the various campaigns, have been ยท assembled and reconciled wherever possible for the purposes of this state record.
Even with such a wealth of original material, lack of defi- nite data often has been evident. Notable examples were ap- parent in the First and Second Liberty Loan campaigns. Requests were made of the Federal Reserve Bank of Chicago, through Frank M. Huston, its statistician, for certain official summaries of statistics of the various Liberty Bond and Cer- tificate of Indebtedness issues. Mr. Huston sent back much material, but with reference to the First and Second bond campaigns he wrote:
"There were several analyses of the subscriptions turned in, but these are the final figures, as accurately as you can obtain them. The statistical data on the First and Second loans are not very complete for the reason, as you know, everybody was
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THE WAR PURSE OF INDIANA
too busy trying to bring about an oversubscription of the loan to pay any attention to the filing of statistics."
In the selection of such totals as are used in this volume it has been necessary to depend largely on the subscription figures as they were recorded finally in the Federal Reserve Bank reports, although these figures in many instances do not correspond with those given by individual county chairmen, state headquarters or newspapers. In the last analysis of subscriptions in the Loan campaigns the Federal Reserve or United States Treasury figures were nearer the truth than any others. When gross inconsistencies have occurred an effort has been made to give the reader access to both sides of the inconsistency. Mistakes are apparent at some points in the statistical part of the record. In any summary of the gather- ing of one-half billion dollars through thousands of separate units, and during a period of two and one-half years, perma- nent mistakes would be sure to appear. Add to this the dis- location of the normal life of Indiana that occurred during the war days and there was much excuse for bookkeeping errors and inconsistencies.
However, it is of the spirit of the people that wars are either won or lost, and it was the spirit of the people of Indi- ana that made the financing of the state's part of the World War possible. This volume, with all its tiresome statistics, all its disappointments to the compiler because of its inade- quacies, may perhaps preserve for the future at least a glimpse of the rise of that spirit in Indiana. If it succeeds in catch- ing, even to a small degree, somewhat of the common view- point of the war years in Indiana-the viewpoint that diverted millions of dollars from former uses to the new para- mount use of the government in its time of need-then it will have served a useful purpose. For, as Dr. James A. Wood- burn has pointed out, the spirit of a people manifested at a time of any crisis is a part of that people's history.
Some will say that it was the bankers of Indiana who made it possible for Indiana to come forward grandly with her contributions to the war purse. Some will say that it was the rich farm lands of the state. Some will say it was the newspapers, with their clarion notes of patriotism, that fanned the spirit of Indiana into a flame. Some will say it was the churches or the schools. Some will say it was this man or that woman, or that group of men or women. But
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INDIANA WORLD WAR RECORDS
it was none of these. Or, rather, it was all of these, and more. It was the composite of three million Indianans, steeped in the dignity of a hundred years of splendid statehood, and called again to sacrifice.
In the telling of such a story few names can be used- usually only those of the leaders on whose shoulders happened to fall responsibility for large areas of the state. To be com- plete the story should hold for posterity the names of 99 per cent. of the three million men, women and children who dwelt in Indiana in those war days. Each one of them had his or her part in the success which finally came.
But this volume cannot be a record of the individual's part in the war financing. County histories are following the in- dividuals through the war period. This volume endeavors to tell what the state did as a whole in war financing. May the Hoosier feel that he is reading the composite story of every loyal Indianan, who did his or her bit in the war finance pro- gram. That is the viewpoint of the volume, and in that view- point it is dedicated to the people of Indiana.
For helpful and constant criticism, and for the develop- ment of the material in this volume the author is indebted to Dr. John W. Oliver, Director of the Indiana Historical Com- mission. In the summer of 1919 he suggested that a volume relating to Indiana's part in financing the World War be pre- pared, and in the work of assembling and preparing this ma- terial there has been constant collaboration between him and the author.
The author also is indebted to Professor James A. Wood- burn of Indiana University, Bloomington, Professor Harlow Lindley of Earlham College, Richmond, and to Charles W. Moores and Evans Woollen of Indianapolis for having read the manuscript and for their valuable criticism.
WALTER GREENOUGH
Indianapolis, Ind.
"There are, it may be said, many months of fiery trial and sacrifice ahead of us. It is a fearful thing to lead this great peaceful people into war, into the most terrible and disastrous of all wars, civilization itself seeming to be in the balance. But the right is more precious than peace, and we shall fight for the things we have always carried nearest our hearts, for democracy, for the right of those who submit to authority to have a voice in their own gov- ernments-for the rights and liberties of small na- tions, for a universal dominion of right by such a concert of free peoples as shall bring peace and safety to all nations and make the world itself at last free. To such a task we can dedicate our lives and our fortunes, everything that we are and everything that we have, with the pride of those who know that the day has come when America is privileged to spend her blood and her might for the principles that gave her birth and happiness and the peace which she has treasured.
God helping her, she can do no other."
President Wilson, in his address to Congress, April 2, 1917.
CHAPTER I.
INDIANA'S FINANCIAL AWAKENING
There was little hesitating throughout Indiana, when Presi- dent Wilson called the Congress together early in 1917, to de- clare that a state of war existed between the United States of America and the Imperial German government. The state flamed into war preparations. Great mass meetings were held prior to the actual declaration by Congress. In every walk of life Hoosiers began to set their houses in order, know- ing not what sacrifices would be asked.
Out of the uncertainty of the first preparations began to issue definite forms, new governmental agencies, new indus- trial organization, new plans for food saving, for the sending of the young men, for the mobilization of relief agencies, and for the planning of the great war finance campaigns.
At a mass meeting held in Indianapolis April 1, 1917, resolu- tions were adopted urging upon the Congress of the United States immediate declaration of war against the Imperial Ger- man government. Similar meetings were held in many parts of the state. Governor James P. Goodrich, in addressing the Kiwanis Club in Indianapolis early in April of 1917, declared that from that moment forward "every issue but patriotism must be set aside."
It was in such determined spirit that Indiana began to plan for her part in the war financing. Opinions were varied about methods that should be used to obtain the necessary money. to carry on the war. Taxation and loans were the two means of raising the money and financial leaders were divided as to which was the better. The two represented in the final anal- ysis the same thing-the people eventually must pay. But whether the people of this generation should attempt to pay all the bills of the war out of their immediate resources by the taxation method, or whether the long-time loan plan should be adopted to ease the immediate burden somewhat were the main questions developed. Financiers and economists arrayed themselves on each side of the question.1 Eventually
1. In a public letter addressed to the editor of the Indianapolis News dated April 3, 1917, Evans Woollen (President of the Fletcher Savings and Trust Company) said : "Sir-How are we going to finance the war? The answer will affect us in important ways. There are, speaking roughly, two methods-the taxing method and the borrowing
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INDIANA WORLD WAR RECORDS
the government decided to utilize the voluntary loan system for the major part of the financing, even though bankers and economists pointed out that such a course would mean inflation and rapidly rising prices, with the attendant evils. Varying maturities of the bonds were provided to distribute the burden of repayment.
The new Federal Reserve Bank system was made the fiscal agent for the government for the bulk of the war financing and its vast reservoirs of elastic credit were needed constantly throughout the war days. Eventually all but a few bankers came to realize the permanent value resulting from the estab- lishment of the new federal reserve system in this country just ahead of the tremendous calls that were made upon the banks during the financing of the war.
The new government bonds were named "Liberty Bonds" and this term, in general, described all issues during the war period.
The first calls of the United States Treasury for money measured by billions of dollars were startling. The later calls for greater sums were met more completely than the earlier. People in Indiana-and America-had to learn how to "buy till it hurts".
method. The borrowing method means either involuntary loans to the government forced by the issuance of paper money or voluntary loans sought by the issuance of bonds. In either case the result is rapidly rising prices, inflation. That this is the result of paper money issues is obvious. It is equally true, though not so obvious, that bond issues result in rising prices. In the one case the result is immediate. In the other case there is intermediately an expansion of credit caused by the purchase of bonds either by banks or by customers to whom money for the purpose has been lent by the banks.
"Rising prices mean that the war costs more, and mean exposure to the dangers of falling prices in the reaction. It is the reaction, the deflation, that will constitute Europe's paramount economie problem at the end of the war. It will be a portentous problem, and we shall do well to avoid a similar one.
"Another economie consideration in favor of the taxing method as against the bor- rowing is that taking from the people their current income, down if necessary to the subsistence point, by means of excess profit taxes and income taxes will promote careful living and lessen waste. Otherwise waste may even be increased by the disposition to spend extravagantly the abnormal profits aceruing from the war. The military con- sideration in favor of the taxing method is that the decreased civilian consumption, just noted, will result in increased supplies for military consumption. The productive power of the country insomuch as released from supplying the needs of citizens will be ren- dered available for supplying the needs of soldiers.
"The ethical considerations against the borrowing method of financing war seem quite conclusive. It is manifestly unfair that the nation should take the life of the conscript and not take the surplus income of the stay-at-home. The chastening of sac- rifice for one's country should be missed none the less by those who stay at home than by those who go to the front.
"Not to guard ourselves against sacrifice but to pay as we go and to transmit to our children, without any bill of expense, the trust we of this nation have from our fathers would seem the way both of prudence and of self-respect, the way to get for ourselves some of the compensation for war that France gets in the quickening of her spiritual life."
15
THE WAR PURSE OF INDIANA
The average Indianan, perhaps, had come to consider that he, in company with his average neighbors, might have to pay taxes to carry on the war to an amount that theretofore would have seemed staggering. If this same average Indianan had been told in 1917 that he eventually would become a part of a financial fabric in Indiana, which would disgorge something near one-half billion dollars for uses quite apart from normal, he would have laughed in the face of the one who said so. Yet that happened, and all within a period of approximately two and one-half years in 1917, 1918, and the first part of 1919. Such results called for the financial mobilization of three million Hoosiers, and could not have been accomplished by any less comprehensive use of the entire citizenship of the state.
The immensity of the financial problems that were to be faced eventually by the people of the state was not realized even by the majority of the bankers of Indiana at the begin- ning of the war in 1917. This is well brought out by a story often told at Loan headquarters during the war, of how one of the prominent Indianapolis bankers, at an early meeting of the Indianapolis Clearing House Association, gave it as his belief that the maximum of bonds that might be sold during the first campaign in Indiana would be $3,000,000. Eventually more than forty millions of the first issue of the bonds were purchased in the ninety-two counties of the state.
The state had not dreamed the truth about its own buying power. And Indiana was like the other forty-seven states in the Union in those early war days. As the war wore on and the demands for money mounted, the bond absorption power of America became more and more the 'Eighth Wonder of the World.'
A vast new bond market developed almost overnight. Care- ful estimates of the total number of bond buyers in Indiana prior to the war placed the number at perhaps ten thousand individuals and institutions. The Liberty Bond, then, to all except these ten thousand, was wholly new. Nothing less powerful than the world-wide publicity attendant on the great war's horrors day by day could have educated the additional thousands of bond buyers, who became purchasers even in the First loan campaign. This campaign enlarged the Indiana field of buyers to between one hundred fifty thousand and two
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INDIANA WORLD WAR RECORDS
hundred thousand buyers, according to estimates of security houses made following the war.
One of the state's leading authorities on the securities market2 said, following the war, that where the bond houses originally had estimated a total of ten thousand "educated" bond buyers in Indiana prior to the war, it was supposed that there were not over three or four thousand actually known to all the investment houses and dealers.
In discussing the quick absorption of the millions of the First loan issue in Indiana this same authority declared that where there had been probably ten thousand bond buyers in the state before the war, the First Loan campaign had demon- strated that there were probably one hundred thousand to one hundred fifty thousand Liberty Bond buyers in the sixty-eight northern counties alone, and apparently the surface had not yet been scratched.
It was shown early that there was real wisdom in the plan to allow purchases of the bonds to be made on the installment plan. This new factor in the sales field had been almost en- tirely overlooked prior to that time and it soon became ap- parent that the capacity of the people to purchase investments on the installment plan would far surpass their ability to pay cash.
The southern half of the state (the twenty-four Indiana counties that were members of the Eighth Federal Reserve District, St. Louis, Mo.), prior to the war had been more carefully developed as a bond sales field than had the north- ern counties. Experienced bond salesmen during the war always pointed to this fact as an explanation, at least in part, for the rapidity with which the southern counties sub- scribed and oversubscribed their quotas, as against the more apparent listlessness with which the campaigns progressed in the northern and central counties of the state. For years the bond houses of Cincinnati, Ohio; Louisville, Ky., and even Indianapolis had spent much time selling bonds in the south- ern Indiana counties. Of the sixty-eight northern counties, tributary to the Seventh Federal Reserve Bank in Chicago, those along the southern tier always were among the leaders
2. George C. Forrey, then of Breed, Elliott & Harrison, Indianapolis, and later Vice-President of the Fletcher American Company, was prominently identified with the state management of the Loan campaign. Files First Liberty Loan, circular dated May 14, 1919, describing the methods followed in the opening campaign.
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THE WAR PURSE OF INDIANA
in the loan campaigns. This was particularly true of such counties as Dearborn, where the education of the public in bond buying had been long under way.
One of the earliest and most constantly reiterated fears of bankers and others throughout the state was that such im- mense bond sale totals as were asked for by the government would wreck the savings banks and would deplete banking resources generally to the danger point. The reverse was true in practically all cases. Such tremendous inflation began to be reflected quickly in increasing bank resources.
Summing up the record of Indiana in war financing before the actual story of the campaigns begins, it is well to call attention to a few outstanding facts. The active official sales organization of the bond drives alone probably totalled twelve thousand Indianans during the First loan. The Second loan brought perhaps twenty thousand individuals directly into leadership as active workers in the sales campaign. The Third and Fourth loans saw the number of active workers greatly increased. It is estimated that forty thousand indi- viduals took part in definite sales programs in the Third cam- paign-when the first real sales organization was developed,- and perhaps sixty thousand became actively engaged in the distribution of the state's quotas for the Fourth loan cam- paign. The Third and Fourth campaigns were, in reality, top-heavy with organization, and the Victory loan, because of that and other reasons, saw the total number of active workers scaled down to perhaps thirty thousand.
It is estimated that a total of at least $500,000,000 was raised by the people of the state during the thirty months of the war financing. This figure probably is low, although it includes all of the five loan campaign totals and the War Savings Certificate and Thrift Stamp sales in both the south- ern and northern Indiana counties. The population of the state at that time was approximately 3,000,000 persons. If every man, woman and child in the state had purchased $166 worth of government securities, the total would reach a half- billion dollars. Estimating the size of the average family in Indiana at five persons, it would appear that for every family in Indiana during the war years there was absorbed approxi- mately one thousand dollars in government securities, and this figure did not include the increases in the family outgo for war relief work, or the higher cost of living.
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CHAPTER II.
THE FIRST LIBERTY LOAN IN INDIANA
The marshaling of the war spirit in Indiana in the spring of 1917 was dramatic. For nearly three years the people of Indiana and the nation had awaited the inevitable. Everyone knew that eventually the war drums would sound for America. Gradually the sparks from the conflagration of Europe were dropping on this side of the Atlantic. A peaceful nation was being drawn into the world struggle that baffled supposition as to duration or sequel.
The awakening of the spirit of Indiana-that spirit which had lent the dwellers by the Wabash fame in song and story - for more than a century - was rather a slow process. The story never will be written completely. For, to be exact, the heart beats of every child that fingered the folds of the flag's in 1917 should be recorded. Suddenly Old Glory became more than just the image of half-forgotten times. It became again the living, vital expression of the super-hopes of a people. In those early days of 1917 thousands of flags were raised offi- cially over the heads of Hoosiers, in byways and highways, to flaunt to the world Indiana's re-awakened patriotism. And it was in the spirit of some of those magnificent flag raisings in Indiana that the story of Indiana's war financing should begin.
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