First World War Flashcards
Why America joined the war
US economic ties with GB and France German U-Boats attack of Lusitania Germany then continuing U-Boat campaign Protection of liberal democracy Zimmermann Telegram
Reason for war 1
US economic ties
By April 1917 US had loaned GB and France 2.3 billion.
Huge investment to be protected
Reason for war 2
German u boats
May 1915 boat Lusitania was attached and 128 Americans died
Led to American support for entering the war
Wilson got a guarantee from the Germans that they would top unrestricted submarine warfare
Reason for war 3
German continuing u boat campaign
Jan 1917 G decided the US was supporting the allies (loans trade etc) and so resumed the campaign
Wilson cut all diplomatic ties after this (Feb 1917)
Reason for war 4
Protection of Liberal Democracy
German victory would undermine liberal democracy
And US wanted to be able to determine peace and felt it could only do this if it got involved
Reason for war 5
Zimmermann Telegram
Sent from German foreign secretary to German ambassador in Washington 1917
Intercepted by Britain
Detailed how unrestricted submarine warfare was to begin and that they expected war with US
Effect the war had on the Economy
Trade
Loans
Army
Govt spending
Effect on economy 1
Trade
1913 American income from trade was about $2 bill by 1916 it was almost $6 billion
By late 1916 GB was spending about 10 mill a day in US trade
Effect on economy 2
Loans
GB relied on US loans raised in NY and were being raised by 4 mill a day
US replaced GB as the most important creditor in the world
NY became financial capital
Effect on economy 3
Army
Selective service act 1917- all men had to register and those to be dragged were chosen by lottery. By the end of the war nearly 3 mill had been drafted
The army had to be supplied and equipped which boosted the economy
War industries board set up 1917- organised supplies and was the first time the Govt had taken a role in directing economic development
Effect on economy 4
Govt spending
Growth in spending-in 1816 it was 1.5% of GNP; by 1918 it was 24.1% of GNP
How they paid for the war
Used 2 main methods
Taxation
Liberty bonds
Taxation
Raised a third of revenue needed
Introduced at a rate of 1%-7% of income and paid only be the wealthiest 1%
1916 Revenue Act-rates of taxation were doubled 2%-15% of income. Also introduced taxes on estates and business profits
Liberty Bonds
Issued from May 1917
Bonds sold to public to support war effort
Could be redeemed later with interest
5 campaigns raised more than $21 billion
Positive consequences of the war
Part 1
Exports rose
Industrial production rose by 39% between 1916-1918
Number of employed grew by 1.3 million and unemployment virtually disappeared
Levels of real wages were higher