WW1 - Economic impact Flashcards
What did the USA become from 1917?
A creditor nation, making loans worth billions of $ to other countries, to fight the war and to repair the massive losses caused by it.
What was the world economy dependent on?
US financial resources.
Describe how US neutrality had beneficial effects on US economy.
Dislocation of European food supplies = US agriculture boomed; farmers could get high prices for everything they produced.
What did huge demands of modern industrialised warfare mean?
Britain and France depended heavily on the US for war supplies, as well as loans to pay for them.
Describe the economy when the USA entered the war. What was a massive infrastructure needed for?
- The economy struggled to cope – was a lot of confusion and inefficiency before war economy was fully established.
- A massive infrastructure was need for the bases where the new mass army would be housed, trained and equipped.
How did the federal government regulate the war economy?
By establishing new organisations.
Describe the 4 organisations and what they did.
- Liberty Loans to raise fund
- War Industries Board to coordinate war production
- Food and Fuel Act to set up a Food administration and a Fuel Administration to regulate and ration resources
- War Revenue Act for increased federal spending
What needed nationalising?
The railroads, to control transportation.
Describe the effect of this economic regulation.
The process was slow and uncertain at first, but it produced a formidable war machine and stimulated economic growth. Exports rose, the steel industry boomed, and there was full employment.
What happened to the economy when the war was over? What did not go too smoothly?
There was a painful adjustment back to peacetime conditions. The process of demobilisation did not go too smoothly.
What led to intense social and ethnic divisions and when?
The slowdown of the economy (brief economic recession) due to the halting of war production led to intense social and ethnic divisions in 1919-20.
Sum up the economic impact upon the USA by the time the war had finished. Which empires had been destroyed?
The war greatly strengthened US economic dominance. WW1 had destroyed the Russian, German and Ottoman empires, and had pushed Britain and France to the edge of bankruptcy. The US was the worlds new economic giant.
