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Economic Effects of World War I on the United States

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Economic Effects of World War I on the United States

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  • Jan. 6, 2014
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Economic Effects of World War I on the United States


During the early nineteenth century most of Europe and the United States entered the First World War. However, when war first broke out the United States refused to enter the war and President Wilson was determined to remain a neutral country. Although the United States wished to remain neutral, they still continued to trade with warring nations, which ultimately caused them to join the war. If the United States had stayed out of the war completely and remained isolated, then the nation’s economy would spiral into a state of depression. Because of the illegal British blockade on Germany’s water boarder, the German U-boats and the Zimmerman Telegram, the United States was forced to enter World War I in order to protect its economic interests abroad and maintain its economy. By the end of World War I the economy and political position of the United States in the world had been changed significantly because of the exponential increase in trade. There was a new world order in which the United States was sitting on the top of the world, being the leader in trade, economy and industry.

Despite the United States’ numerous attempts to remain neutral it still decided to join World War I in the year 1917. Upon learning this, a common question is; why did America enter the war. One of the main reasons for the United States entering the war is because of the constant attack from German U-boats. After Great Britain had put up the illegal blockade around Germany, Germany was lacking desperately needed supplies. Although the United States were free to trade with any nation, the British would not allow even neutral ships in Germany’s ports. Therefore in order to keep the British from trading and getting more supplies, the German’s used the U-boat, a submarine, to attack unsuspecting enemy ships. Eventually Germany attacked neutral and enemy ships alike because Great Britain had begun using neutral...