William G. McAdoo to Woodrow Wilson
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Dear Mr. President
I gathered from what you said at the Cabinet meeting yesterday that you had the impression that I had been consulted by the Shipping Board concerning the plan announced in the papers for the expenditure of $1,000,000,000 in the construction of merchant ships. As I then stated, I was not consulted about this matter and knew nothing of it until I read about it in the papers. I, of course, have no right to expect that I will be consulted about matters of policy, which are solely within your own determination, such as the policy involved in this measure, but do you not think that your Finance Minister should have an opportunity to be heard where such huge expenditures are concerned before the policy is adopted? It is not possible for me to properly conduct this Department and to deal effectively with the really prodigious problems of finance which now confront the country unless I can be informed about the larger policies that may be in contemplation and be permitted to advise whether or not the necessary moneys can be raised before final decisions are made. In almost every Department large estimates are being made and transmitted to the Congress without the slightest consideration as to how the money is to be provided. In every country in Europe the Minister of Finance is one of the War Council, because it is everywhere recognized that money is a fundamental problem in war and that the Finance Minister must be able to advise about ways and means before commitments to great expenditures are made. Please do not take this as a suggestion that your Secretary of the Treasury should be on the Council of National Defense. I prefer not to be a member of that body -- my only point is that the Secretary of the Treasury should be consulted before we enter upon policies requiring enormous expenditures of money.
Perhaps you may recall that I suggested in our conference April 30th, that you request the Shipping Board to act in the closest cooperation with this Department, but that you did not look upon it with favor. The more I see of the progress of events here, the more I am convinced that this Board ought to be related closely to some one of the Executive Departments, unless you can, yourself, take the burden of keeping in direct and intimate touch with its activities. The future will demonstrate, I am sure, the correctness of this judgment. I do not want the job myself, but I think the matter so important that I would suggest that the proposed amendment to the Shipping Bill contain a provision making either the Postmaster General or the Secretary of Labor Chairman Ex-Officio of that Board for the period of the war. Either of these men would be very helpful -- more so than the Secretary of Commerce under existing conditions. I have found that these independent commissions work much better with the Administration if a Cabinet officer is at their head. The Federal Reserve and Farm Loan Boards are cases in point. The present Shipping Board has developed some weaknesses to which it will be a grave mistake to shut our eyes. My advice may be worthless, but I shall, at least, have discharged my duty in bringing these matters to your attention.
I beg you to believe that this is written in no captious spirit; it is prompted solely by a desire to secure effective cooperation in the work in hand and to conserve the credit resources of the Nation for the colossal demands of the war.
WG McAdoo
The President,
The White House.
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