Effects Of Ww1 On American Economy

The destruction of industry, agriculture, and finance, which arose during WW1, held severe consequences for the world economy. The goods that the continents of South America, Asia, and Africa produced were no longer as desirable to Western European consumers during wartime. With their chief customer and banker unable to support their economies, these continents endured financial struggles. The Baltic Sea had been closed off by the Germans and the Black sea by the Ottomans. With Baltic and Russian grain, which Europe had relied on, having been cut off, Western Europe was forced to become dependent on American agriculture. Raw materials such as Zinc, which was used to create Munitions, had been cut off by the Germans as well, forcing Europeans

The meat producing regions of France had been occupied and cut off by the Germans. The supply of grain produced in Russia and the Balkans had been blocked by the Ottomans and Germans from reaching Western Europe. Even the demand for forage, essential for feeding mules and horses during times of war, outstripped the available European supply. The disruption of such essential food sources gave rise to Western Europe’s reliance on American agriculture and livestock. In the nine months ended with May 1915, America shipped $431,000,000 of breadstuffs, compared with $107,000,000 in the previous year. Europe required materials of war as well, for which production had been severely affected by the German blockades. Zinc, a crucial component of munitions, had to be sourced from America. Textiles, Automobiles, and other tools of war experienced a surge in demand as well. In the whole group of war supplies America sent abroad $148,000,000, an increase of $119,000,000 over the year before. During the war, America exported goods to Europe at an unprecedented level. Tooze, a modern economist, states in his writings on the American Economy, “By the end of 1916, American investors had wagered two billion dollars on an Entente victory.” The circumstances of WW1 propelled the US into economic supremacy, creating the opportunity for America to

While the country had been experienced significant industrialization during the gilded age, in WW1, demands for supplies from war-torn Europe gave rise to increased output in many sectors of the US economy. Edward Clapp, an economist of the era, observed the economy undergo diversification during WW1. Clapp States, “There was a shifting of our output. We were making and selling what we never made and sold before.” Americans gained opportunities to produce goods that the war had made profitable. Fig. 1 shows a near quadrupling in the value of exports to the Allies between 1914 and 1916. Increasing demand allowed the US to export huge quantities of war supplies, focused primarily on raw materials, ammunitions, and semi-finished products. In 1913, Henry Ford introduced the assembly line into his car production plants. The time it took to assemble a Model T was drastically reduced from 12 ½ hours in 1912 to 1 ½ hours in 1914. In 1918 American shipyards delivered as much as the entire world had launched in 1913 – 100 ships on 4 July 1918 alone (Independence Day). The agricultural crisis in Europe created an urgency to acquire American produce, leading to a quadrupling of agricultural exports between 1914 and 1915. The demand for machinery, materials, and produce in wartime