The Midwest and South
During the first half of 1918, as the national labor market slowly contracted, the Midwest and the South both began to recognize the need for a defensive strategy in their relations with Washington. With the exceptions of Illinois and Ohio, both regions were still heavily agricultural and contained significant pools of labor that could be used to meet the national emergency. The heavily industrialized Northeast had attracted the bulk of the war contracts which had created in that region both an insatiable demand for labor and an attractive, high-wage structure. By the summer of 1918, both the Midwest and the South had become very concerned that the wartime migration of their labor to supply eastern industrial plants would have very significant, immediate, and long-term effects on their own economies and were seeking ways to minimize that impact. This created obvious problems for the USES.
The administrative situation facing the USES in the two regions was very different. In the Midwest, unlike the South, the Department of Labor had to negotiate with state governments that were already deeply involved in employment activities. When the United States entered the war, the Midwest was probably the most advanced region in the country in terms of the sophistication of its state-funded employment offices. Wisconsin, Ohio, and Illinois had set the pace in the immediate prewar period. In particular, Ohio, under Fred Croxton's guidance, had created an exemplary public employment system out of the old state offices in 194-15, and had then dramatically expanded and further improved the system immediately after the American declaration of war. During 1917, the Ohio system was one of the largest and undoubtedly the most sophisticated in the country.1