Departmental Reorganization Act

The Departmental Reorganization Act (40 Stat. 556, May 20, 1918), also known as the Overman Act, was an American law that increased presidential power during World War I. Sponsored by Sen. Lee S. Overman, a Democrat from North Carolina, it gave President Woodrow Wilson sweeping powers to reorganize government agencies "during the continuance of the present war and for six months after the termination of the war by the proclamation of the treaty of peace, or at such earlier time as the President may designate." (40 Stat. 556) With its authority, Wilson created the War Industries Board, the National War Labor Board, and the Committee on Public Information.

Established by the Council of National Defense under Wall Street broker and Democratic Party activist Bernard M. Baruch, it regulated much of the economy, setting production priorities for factories, and establishing centralized control over raw materials and prices. Mass production techniques were implemented in heavy industry to increase efficiency. The WIB required products to be standardized. It also conducted psychological testing to help people find suitable jobs. The WIB also dealt with labor-management disputes resulting from increased demand by freezing wages and forbidding strikes. With WIB direction, industrial output in the United States increased 20%. The downside, however, was soaring retail prices. Many large industrial firms resisted Baruch’s tight-armed tactics, especially U.S. Steel then headed by Elbert Gary. U.S. Steel made enormous wartime profits. Between 1915 and 1919, those profits equaled the wages received by the 2 million U.S. soldiers in France combined. Baruch threatened to take over U.S. Steel unless the company agreed to lower its prices. Gary sneeringly said that the government wasn’t capable of running the company. Baruch replied that he would get a 2nd Lieutenant to do the job. “But that won’t trouble you very much,” he added. “If those mill towns find out why we’ve taken over, they’ll present you with your mills -- brick by brick.” – Gary agreed to lower the prices. At WIB suggestion, the Treasury Department sponsored the selling of Treasury Bonds, called the “Liberty Loan Drives.” Such drives were pushed for by the War Finance Corporation (WFC) under Eugene Meyer. Popular actors and actresses like Charlie Chaplin, ”the little tramp,” Douglas Fairbanks, Mary Pickford, ”America’s Sweetheart,” and Sarah Bernhardt publicly campaigned for people to buy them. The campaign raised the then astronomical sum of $21 Billion. Secretary of the Treasury McAdoo even said of the bond drive: “Every person who refuses to subscribe…is a friend of Germany and is not entitled to be an American citizen” and “A man who can’t lend his government $1.25 per week at a rate of 4% interest is not entitled to be an American citizen.” Another popular slogan was “Lick a stamp, and Lick the Kaiser.”

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