I have another World War One question?

Question

Even though the U.S. was still neutral, its economy became closely tied ot the allied Powers. Explain how this happened.

Answer 1

Well, for one Europe was still a big trading partner, so of course the outcome of the war and the US economy would be closely tied.

I also know that in WWII the US sold ships and weapons to their "Allies" for exorbitant amounts, basically taking place in war profiteering. I don't know if this took place in the first war as well, but I would not doubt it.

Answer 2

While we were neutral as to the war we still sold goods to whomever had the bottoms (ships) and cash. At the beginning of the war, the allies had quite a trade from north America because Canada was still part of the empire and was basically the breadbasket for England. Most of these bottoms (ships) also called in various places in America because they were coal fired and not all had extended range for carrying cargo directly from the empire back to England. In these ports, cargo of opportunity was bought and sold increasing the trade.

Additionally there was quite a business in American produced military hardware and raw materials. At the beginning of the war, most banks and banking institutions were more than glad to provide loans to the British depending on the cargo that was being bought and how it was being shipped.

The Germans also bought quite a bit of coal in the beginning of the war but were soon told that our neutrality was going to be enforced so most of their ships calling in US ports after the first month or two were warships looking for fuel and water. Rather than be impounded they started calling in South America. The British shipping was mostly merchants so was not impounded and a good trade continued throughout the period until the US could be brought into the war.

Answer 3

The Neutrality act of 1935 was intended as a warning to Allies and Axis states. Hitler used the US as much as England did until Japan made the last vestiges of neutrality impossible (Pearl Harbor). It was a hard tightrope to walk, but FDR had to walk it. It was skirted in every possible way at every possible time, but until England formally declared war on Germany after the invasion of Poland, there was no need for the president to do as provisions on the Neutrality Act's opening page required--declare that a state of war exists between trading partners. At that point, all kinds of things happened. Americans could no longer invest in Germany's businesses, or debt government or corporate (also listed early on in the act). Proceeds from trade with the beligerents could be confiscated or an excise tax assessed, which essentially took away the profit potential for Americans to trade.

Part of the imbalance in trade, sprung from two primary facts. Germany had just recently climbed out of what was essentially a national bankruptcy. The hyperinflation following WWI (one of the contributors to the world-wide economic depression), taught creditors that if Germany wanted to again, they could pay off debts with future worthless Marks (their unit of currency). Another reason is that American public opinion was already developing sides. We could see that sinister things were going on in Germany and many businessmen wanted nothing to do with it. There were notible exceptions, few more obvious than Charles Lindberg for the Americans. It must be remembered too, that there were highly connected and influential Englishmen that were on Germany's side in political opinion--the English royalty was related to German royalty, so their ties, especially thanks to German Chancellor Bismark, were obvious and strong.

To the world of that day, trade on the European continent was essentially like trading with Iraq before George W fought to topple Saddam. It was morally and ethically questionable, often done on the sly, and immensely profitable to a wide network of well-connected people who had reasons running from pure greed, to espionage. Americans, even to 1941, were doing business in Germany, and our government wined and dined reporters and businessmen for details of what was going on and where. The Germans did the same in North America. They had high hopes for persuading Mexico to ally with Germany and Japan, bringing the war to North America early in the game when all pretense was lost and the war began. Germany had a strong industrial base, and unique war weapons, so their stocks and supplies of raw materials from Africa, Latin America, and promises of Japan regaining former Pacific Island holdings (rubber and oil) were plenty. Germany didn't want to become dependent on American business--they planned to annex most of it in a few years.

Answer 4

this is very critical question ..don't think about it..think about some hitng else.....god bless u..