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The United States during World War I

World War I brought much death and destruction to all the belligerent states. However, the military operations were not conducted within the territory of the United States. Unlike the European countries, the U.S. did not experience any enemy occupation or bombardment. The economy of the country grew stronger and the position in the world significantly strengthened because of the war.

Many reasons forced the United States to enter World War I. It is believed that the country joined the fighting because of the sinking of American ships by the German submarine. In fact, the United States entered the war due to other goals and reasons. However, the most important and, perhaps, main cause of the U.S. entry into World War I was ever-increasing depletion of material, financial, and human resources in Europe.

The accumulation of gold and the U.S. capital saturation were one of the reasons to enter the war. The business based on military orders was becoming risky in terms of the monopolies because the war could suddenly end and orders would remain unpaid. The U.S. entrepreneurs were frightened of the coming collapse of the European economy. They wanted to end the war before the complete exhaustion of the countries involved in the war, especially Germany (Keene, 2014). The prospect of providing the poorly secured loans to exhausted Europe was not bright. There was just one way out, namely to draw the United States into the war, stimulate the military production, and ensure new high profits for the monopolies.

Another reason lies in the fact that the possibility of the war end meant the struggle for a new division of the world; therefore, the United States joined the fighting on the side of the Entente in order to participate in the world’s division on equal terms.

The impact of the war on the U.S. domestic situation was marked with the increased government intervention in the economy. It was expressed in the growth of public contracts, provision of loans and grants, as well as the issue of state loans. The U.S. military industry was provided with broad authority to distribute and execute military orders, regulate fuel and food markets, labor, transport etc. Despite the fact that the United States in the war years considerably enriched itself, military spending (around $ 36 billion) fell on the shoulders of the population (Markham, 2012). The government raised taxes (especially indirect) by 5.7 times compared with the pre-war level in order to cover those costs and issued much paper money, which led to higher inflation (Markham, 2012).

The immediate effect of the peace process on American foreign relations consisted in the U.S. political isolation from European affairs. After the failure of the Woodrow Wilson’s “Fourteen Points,” the United States decided to be in isolation from the international policy in Europe. At the same time, the country chose an economic factor as a priority instrument of foreign policy in the region. The Dawes (1924) and Young (1929) Plans demonstrated the degree of economic dependence of the countries of Europe upon the United States (Folly & Palmer, 2014). The U.S. had been a debtor of the European countries before World War I, but it subsequently became an overwhelming creditor after the war.

As a result of World War I, the United States strengthened the economy and position in the world. Using a noticeable weakening of the European countries, the U.S. managed to come out on top of the world economy and hold that position to the present time.

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