Impact Of World War I ( 1914 ) Essay
The state of the US economy in the period leading up to direct intervention in WWI can be well characterized as a dramatic plot twist. In sharp contrast to the the limited economic role that the United States played in the global economy prior in the early days of WWI, America’s progression towards direct involvement in the war catapulted it into a major economic power.
As we discussed in class, the early days of the war were awful for the US banking system. This is because of widespread financial panic in Europe that let European investors to liquidate their American securities.This was a significant issue because without gold supplies, the US banks are unable to make many loans and the loans they can make would have to be at a high interest rate. In order to prevent more transfers of gold, McAdoo, US treasury secretary shut down the NYSE for the remainder of 1914.
In light of this fleeting economic hit, the US was soon given an opportunity for tremendous economic gains. As we learned in class, the US made 70% of the world 's crude oil at the time.Additionally, Britain, France, and other allies needed huge amounts of oil and would end up getting 85% of it from the US. The allies also demanded huge amounts of wheat and other agricultural commodities. This demand, in tandem with mediocre harvests abroad, produced record profits for US…