The Impact of the First World War on the USA?


Positive Impact on the Economy

USA continued to trade with Europe despite the war. In 1913, American trade was at $2 billion by 1916 it was almost $6 billion

Late 1916, Britain was spending $10 million a day on war good purchised from the US

Initially financed by selling off assets in 1915 Britain relied heavily on loans from the US. By 1916, loans were being raised at the rate of $4 million a day, leading to USA replacing Britain as the most important creditor nation

The armed forces being supplied and equipt, provided considerable boost to all sectors in the economy

There was increased growth in federal governement, spending 1916=1.5% of GNP, 1918=24,1%

Taxation raised 1/3 of the revenue neede to pay war costs

1 of 8

Positive Impact on the Economy Continued...

Changes in income tax, led to a rise in revenue from $809 million (1917) to $3.6 billion (1918). The Revenue Act, 1916- ates were doubled to bring in more money, up to 2%-15% of income

Five Livery Loans campaigns- 1917-1919 raised more that $21 billion

Huge demand for war materials- imports in Europe fell and exports rose. Growing demand meant industrial production increased by 38% (1916-1918)

Employment of civillian workforce grew by 1.3 million. Unemployment at 5% virtually disappeared

US banks lent large amounts to European countries at high interest. Shifted from debtor to creditor nation, 1919 USA oversea's investment $10 billion

USA experienced no war damage so could continue to develop

2 of 8

Negative Impact on the Economy

Disruptions in trade - Britain and France blocked trade to Germany and Austria, -U-boat campaigns by Germans sunk some ships

April 1917-Novmeber 1918- cost of fighting high- estimated USA spent $31.2 billion on war in Europe

USA was a creditor nation, however it was borrowing money to pay for war

Level of national debt increased by 658% (1916-1919) to just over $21 billion

At the end of the war, 1918 rapid de-mobilisation of troops and the cancellation of war time contracts, lead to an immediate slowing down of the economy

Due to this there was a brief recession in 1920-1921

3 of 8

Positive Impact on Society

1914, US army relativly small-120,000 men. US governement needed to increase that

The War Industries Board advised companies on how they might make efficiencies. It encouraged companies to work together, even though they were previously rivals

Greater uniformity was used such as bike production which saved 2000 tons of steel

The Liberty Loans campaigns were accompanied by publicity and rallies, urging the public to buy bonds. this was done by leading celebrities such as Charlie Chaplin

Living standards increased

Real wages were higher in 1918 than 1914, unskilled workers recieved 20% raise

4 of 8

Positive Impact on Society Continued...

American farms icreased exports by 300%, doubling in price between 1913-1918

Railways promoted modernisation, creating standardised national system with intergrated timetables and standardised track guage

There were set limits on coal and oil prices and regulated time with 'daylight saving time was introduced as part of conservation

War gave powerful push for women, whose contribution was recognised. 1917, New York gave women the vote. January 1918- 19th Amendment, provide votes for women nationwide. August 1920 -HOR passed

5 of 8

Negative Impact on Society

Conscription was introduced, known as the draft. By the end of the war, nearly 3 million men had been drafted

Income tax was introduced in 1913 at a low rate and paid only by the wealthiest 1% who had an income of above $500,000

1917 War Revenue Tax- income tax was extended, anyone who earned more than $2,000 paid 2%, $40,000=16%, top rate=67%

1918 Revenue Act increased the lowest rate to 6% and the top rate to 77%

112,500 Americans in military service died in the war, more than half from diseases e.g. typhus and the 1918 influenza pandemic

To meet the national debt, tax levels needed to remain high even after the war

6 of 8

Negative Impact on Society Continued...

Espionage Act, June 1918- Considerable limitation on personal freedom- illegal to attept to construct military recruitment and to encourage disloyalty -film producer- ten years jail sentence, for making anti-british film

The sedition Act, May 1918- illegal to discourage people from buying war bonds or verbally attack the constitution -Eugene Debs- 10 years in prison- anti war speech

In total 1500 people were locked up

Prohibation- banning alcohol to help the war effort, to increase efficiency in the workforce. Also most breweries were of German decent.

There was a fear that using grain for alcohol would impact on the food supply

The Lever Act stopped the sale of alcohol near army bases but also reduced the use of grain and the amount of alcohol in beer -1917

7 of 8

Negative Impact on Society Continued... 2

1918 - Prohibition Act stopped sale and manufacture of alcoholic drinks

December 1917, the 18th amendment was passed to make it permanent

October 1919- Congress passed The Volstead Act, illegal to sell, transport or manufacture alcohol above 0.5% from January 1920

The war also strengthened intolerance of foreigners and those who don't conform, partriotism turned to prejudice

German sounding names faced popular abuse, 'sauerkraut' was changed to 'liberty cabbage'

The war encourages anti-immigration movements and the Red Scare of the 1920's.

8 of 8


No comments have yet been made

Similar History resources:

See all History resources »See all America - 19th and 20th century resources »