There were countless reasons as to why the US entered into WWI on the side of
the Entente powers. Yet the American public saw the European war as a “dreadful thing”
and opposed it completely at its offset in 1914. That same public just 3 years later however
strongly supported going to war in 1917, what had changed? Please join us as we
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At the outbreak of WWI, there was no reason for the United States to enter
what its public saw as a “European war”. The American population was made up of immigrants
who held divided attitudes towards the belligerent nations involved and President Woodrow Wilson,
who had been elected in 1912, and believed that it was the mission of the US to promote
democracy worldwide, thought the US should not enter the war. Thus he declared American
neutrality at the outbreak of the conflict . However at the same time Wilson proclaimed
neutrality, Britain began a naval blockade of the Central Powers. American companies had been
shipping food, raw materials, and munitions to both the Entente and Central Powers, but were now
being turned away by the Entente blockade. Wilson tried to get the belligerents to accept the 1909
declaration of London, which recognized the rights of the neutral trade convoys, but the
British refused. Their government did not want to antagonize America further and set up a program
to purchase American cotton and when US ships were stopped by the blockade the contraband items were
purchased by Britain and the cargoless ships were released. The situation angered the Americans, but
also resulted in increasing financial ties between the US and the Entente powers. This also rendered
the German surface navy useless, leaving it with only one viable naval weapon, the submarine.
In 1913 America was undergoing a devastating recession and before the war's outbreak,
the US economy was in a real downturn. When the conflict started, the munition plants in the US
began to fill with orders for war materials for the belligerent nations , principally the UK,
and economic recovery started. American production went up 32% by 1917 and the Gross
national production increased by 20% . One of the hardest-hit industries by the 1913 recession
was the American steel industry, but because of the war, demand skyrocketed . The naval blockade
however meant all of these goods were going to the Entente Powers. In spite of the neutrality,
the US began to loan far more money to the Entente rather than the Central Powers. J. P Morgan Bank,
became the largest lender financing Britain and France and J.P Morgan’s New York Office
was designated the primary financial agent to Britain and primary issuer of loans
to France . The loans led to trade and the trade led to the production of war materials
and thus a precursor to the military industrial complex as we know it today was being born.
When Germany invaded Belgium in 1914 it engaged in numerous atrocities against the civilian
population. Much of this was the result of fears of Belgian guerillas which led the
German army to burn property, execute civilians and loot industrial raw materials for the war
effort . The Entente powers propagated all of this to great effect, colloquially known as
“the rape of Belgium” . Iconic and graphic imagery depicted Belgium as a brutalized woman ran rampant
throughout the American press . Much of Britain's war propaganda was aimed at attracting American
support and by far and large it worked despite the fact many of the stories were fabrications.
As a result of the Entente naval blockade, Germany resorted to using submarine warfare
to do the same to Britain which it was doing to Germany, heavily pushed by Admiral Alfred von
Tirpitz . The decision to use submarines was made on September the 5th of 1914 and that month alone
U-9 sank 3 British cruisers persuading the German high command to increase its submarine operations.
Soon Germany declared the coast off Britain and the English Channel a warzone asserting
that all merchant ships traveling through it risked attacks. At the same time, Germany
also promised to try and avoid neutral shipping. However, the British use of neutral flags made it
impossible for Germany to do so effectively. The German submarines began torpedoing ships without
any warning, arguing that surfacing first near merchant ships was too risky as they
could be fired upon. Britain was indeed arming its merchant ships legitimizing such claims.
In February of 1915, the US gave Germany a warning about its misuse of submarines
and in April Germany responded by warning US citizens not to board British vessels which might
be attacked. Then on May 7th disaster struck, the British passenger liner, RMS Lusitania was sunk by
a U-20 killing 1198 civilians, amongst them 128 Americans . The American public was outraged,
but Woodrow Wilson still refused to declare war , and instead began negotiations with Germany,
who eventually agreed to restrict its submarine campaign . This became known as the Sussex Pledge:
from then on they would only attack ships that were definitely British and head of the German
Admiralty, Henning von Holtzendorff issued a secret order for all U-boat to stop operations in
the English Channel and off the west coast of the UK and instead to operate only in the North Sea.
In November of 1914, Woodrow Wilson began to fear that his foreign policy would not
succeed in Europe. While he privately considered military preparedness,
publicly he rejected the need. In 1914 the president was presented a plan for military
preparedness, but rejected it stating it would be a shock to the American people and that even
if Germany won the war, the nation would be too exhausted and in no position to threaten the US.
However this all changed after the events of 1915 which sprung forth a strong military preparedness
movement. The movement argued for the build up of naval and land forces for defensive purposes under
the presumption that the US would end up fighting in the war sooner or later. The movement was
pushed by ex-president Theodore Roosevelt, General Leonard Wood, as well as former secretaries of war
Elihu Root and Henry Stimson. American industrialists and bankers backed the movement
as it aligned with their commercial interests. The arguments for preparedness were quite valid . They
pointed out that the militaries of most great powers were all larger and better trained than
the US military. Proposals were brought forward to increase the US military to 600,000 men
and to begin mandatory 6 month military training for all men who turn 18 every year.
These proposals were rejected for a plethora of reasons , but Wilson managed to reach a
compromise in 1916, enacting the National Defense Act , and the Naval Act which sought
to expand the US Navy to compete on the same level as the Royal Navy or Kaiserliche Marine.
The preparedness programs were met with wide-scale protest by anti-militarists,
placing Wilson in a lot of trouble as he was up for election in November of 1916.
Despite this Wilson and his “he kept us out of war” campaign won by a very narrow margin .
By January of 1917 the situation in Germany changed. The Germany Navy convinced the military
leadership and Kaiser Wilhelm II that Germany could win the war if they resumed unrestricted
warfare. They argued that the Sussex Pledge was pointless because the US was not neutral as they
were supplying munition and financial aid to the Entente powers and by resuming unrestricted
submarine warfare they could defeat Great Britain within 5 months’ time, before the US could land
forces in Europe. Thus the German government decided to resume unrestricted submarine warfare
in January of 1917. Wilson was stunned by the news and went before Congress on February 3rd,
announcing the US would sever diplomatic ties to Germany, but not declare war as he believed
the American public would still not support the motion. From February 3rd until April the 4th
German U-boats sunk 10 American vessels , resulting in the deaths of numerous
American seamen and civilians. By February 26th, Wilson used an executive order to arm
US merchant ships citing an old anti-piracy law. When Germany decided to resume its unrestricted
submarine warfare, it did so with the assumption the US would declare war eventually.
To further thwart American transportation of supplies, war materials or future
troops against Germany a plan was formed to establish a military alliance with Mexico.
Since 1914, Germany had secretly armed Mexico and even made attempts to incite war between Mexico
and the US in 1915 , tying down the US military and hindering US shipments to the Entente powers.
Then a telegram was sent by Arthur Zimmermann to German ambassador to Mexico, Heinrich von
Eckardt . Since the start of the war the British had cut the German international cables and thus
German telegrams were relayed through the Atlantic Communication Company under the control of the US
Navy. The cable ran from Sweden, to Denmark and onwards to the United States. However, the cables
also passed through a relay station at Porthcurno in England which was secretly being tapped by
British codebreakers in Room 40 of the admiralty. The Germans persuaded the US ambassador James W
Gerard to accept the telegram in coded form to be transmitted to Mexico on January 16th of 1917.
British codebreakers had broken the German codes and realized they held information that could
sway the American public against Germany, but there was a major problem. To make it public
meant the Germans would know Britain had broken its codes and the Americans would
know Britain was secretly tapping US cables. The British came up with a cover story,
stating that British agents had stolen the telegram in Mexico and would provide the Americans
with the German codes to verify the message if the Americans did not make the German codes public.
The telegram was sent to Edward Bell, American secretary to Britain on February
19th and upon reviewing its legitimacy it was eventually given to Wilson by February 24th.
The White house released the information to the public on March 1st 1917 while more US
ships were being sunk by U-boats. The American public opinion had
changed dramatically over 3 year leading by 1917. Prior to the Zimmermann telegram,
the American public was divided into 3 groups: those who advocated for war against Germany,
those who opposed war but were determined to defend America’s national honor and those who
wanted to keep the US out of the war completely. British propaganda, unrestricted submarine warfare
and the Zimmermann telegram brought a large part of the American public to believe
it was their moral right to fight to make the world a safe place for democracy.
Now the US government did not directly finance the Entente powers prior to its entry into the war,
nearly all the loans between 1914-1917 were syndicated by J.P Morgan & Co. J.P Morgan was
the lead bank organizing a cartel of other banks selling bonds to private investors on behalf of
Entente powers . Cecil Spring Rice , a personal friend to J.P Morgan made him the sole purchasing
agent for the requisition of war materials and weapons for Britain and France, because without
having a singular agent, the Entente powers would be bidding against another and this would
have driven up prices. This all gave J.P Morgan incredible power within the US market to pick and
choose which companies would get their share of the billions of dollars from the Entente powers.
Everyone involved in the war supply industry scrambled to befriend J.P Morgan. Soon all
of these business orders and those who purchased bonds had an enormous stake in an Entente victory.
If the Entente powers failed to win the war, they might default on all those debts to the US.
The issue of finance becomes even more apparent when looking at the Siberian Intervention.
By the end of WWI America was the largest wartime creditor and over the course of the war,
Russia’s indebtedness rose dramatically indirectly caused by America. Following the outbreak of WWI
J.P Morgan was one of the first to loan 12 million dollars to Russia. On February 8th of 1918 the new
Soviet Government repudiated all bonds issued by the Tsarist government and canceled all previously
issued Russian government debt . This caused a massive backlash from the western government who
were the creditors. The Siberian Intervention was obviously not only due to the repudiation of debt,
but the financial interests of the creditor nations was a rather powerful motivation.
On March 21st, Woodrow Wilson gave his administration a week to prepare legislation for
Congress that would authorize him to declare war. By March 28th, Wilson broke diplomatic relations
with Austria-Hungary and On April 2nd Wilson addressed Congress . Wilson argued that because
Germany had taken actions that violated American rights and international law, the US needed to
enter the war to stop the German government. He stated that the US was fighting the German
government not the German people, as America was a friend of the German people. Wilson also stated
that the US was entering the war to defend the ideals of democracy, liberty, and freedom. The
war would "make the world safe for democracy" and be a "war to end all wars". On April 6th,
Congress approved the declaration of war and Wilson declared war with Germany on April 7.
By the end of WWI, the US had become the world's most important trading nation
as well as its largest banker. The Bureau of Internal Revenue quadrupled in size,
the income tax produced 31 times as much revenue as it had in 1916. Nearly 21 million Americans,
around 22% of the US population, had voluntarily subscribed 7 billion to the Fourth Liberty Loan.
After the war the US began investing large amounts internationally, particularly in Latin America
taking on the role traditionally played by powerful European nations such as Britain.
New York emerged as London's equal if not her superior as the world's financial center.
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