Effect of no WWI entry on American Economy

What would the American economy look like if the American's didn't enter WWI? And what were America's main trading partners in the 1910s and 1920s?
 
The big question is, does the US stay out but still sell huge amounts of weapons and lend huge amounts of moeny to the Entente? Or are the "true neutrals"?
 
The big question is, does the US stay out but still sell huge amounts of weapons and lend huge amounts of moeny to the Entente? Or are the "true neutrals"?

Probably supplying the Entente, but not in as huge quantities as OTL.
 
The big question is, does the US stay out but still sell huge amounts of weapons and lend huge amounts of moeny to the Entente? Or are the "true neutrals"?

They become "true neutrals", or at least move considerably nearer that position.

By 1917, Britain had used up virtually all the investments etc in North America which could be used as security on her loans form US banks, and without these loans she would have to drastically reduce her purchases. The only way out of this dilemma would be for the US to start granting unsecured loans, which the Federal Reserve, backed up by the Wilson Administration, strongly opposed as long as America was neutral. In fact, no unsecured loans were ever made until after US entry into the war.

There is also the possibility of American sanctions on Britain in retaliation for British blacklisting of certain US companies, but even without that, US exports to the Allies are likely to sharply dwindle, and loans to virtually cease.

This aspect is discussed in many books, of which imho the best (and certainly the most readable) are by Patrick J Devlin Too Proud to Fight - Woodrow Wilson's Neutrality and Justus D Doenecke Nothing Less Than War - A New History of America's Entry into World War I.
 

Flubber

Banned
What's with all this "true neutral" horseshit?

The US was happy to sell to anyone who could carry their goods away and the US was happy to lend to anyone who had the necessary collateral. It wasn't the US' problem that the CP wouldn't/couldn't break the Entente blockade, just as it wasn't the US' problem that the CP had no reason to apply for loans from US banks to buy US goods it couldn't import from the US.

You cannot get more neutral than that without turning into a hermit kingdom.

The first effect on the US economy of no US entry in the war will be an Entente credit crunch in 1917. Purchases by the Entente will drop significantly and the economic boom sparked by war production will come to an end. Just how the newly setup Federal Reserve and government handle the end of the boom is open to conjecture. They were aware of the potential however.

The second effect on the US economy will depend on how badly the Entente, primarily Britain, is damaged in the war and how that damage will effect British loan payments post-war. Sketch out different endings for Britain - Pyrrhic victory, white peace, defeat, and/or revolution - and you can sketch out different problems with British loan payments.

There's an old truism that goes: "If you owe the bank 100 thousand and cannot pay, you have a problem. However, if you owe the bank 100 million and cannot pay, the bank has a problem." Entente loans were secured to a varying extent but, just as the property bubble should have taught us, sometimes the value of collateral can drop too.

Again, any conjecture on just how the Fed and government handle any post-war loan payment crisis will depend on the details of the crisis.
 
What's with all this "true neutral" horseshit?

I too have reservations (to put it mildly) about that term, hence the quotes round it. However, I preferred to get on with answering the question rather than bicker over terminology.

As to the economic effects, there'll pretty certainly be a recession, as there was anyway, with the ending of the war and its associated business. However, the Administration and the Fed were clearly aware of the danger, and determined to do whatever was needed to keep it within bounds. And if it has to be, better politically to have it in 1917 than in the election year of 1920.
 
Last edited:

Flubber

Banned
I too have reservations (to put it mildly) about that term, hence the quotes round it. However, I preferred to get on with answering the question rather than bicker over terminology.


I'm not bickering over the terminology. I'm questioning the muddled thinking behind the use of the term, use by people other than you.

As to the economic effects, there'll pretty certainly be a recession, as there was anyway, with the ending of the war and its associated business. However, the Administration and the Fed were clearly aware of the danger, and determined to do whatever was needed to keep it within bounds. And if it has to be, better politically to have it in 1917 than in the election year of 1920.

Agreed. Also, an ATL recession in this 1917 will be less sharp than the OTL one in 1920 because the input from OTL US war effort will be absent.
 
What if the Entente lost in 1917, but without losing their colonies, and with German hegemony on the continent, but no devastation in Britain beyond OTL (and in fact, less British soldiers lost).
 

Flubber

Banned
What if the Entente lost in 1917, but without losing their colonies, and with German hegemony on the continent, but no devastation in Britain beyond OTL (and in fact, less British soldiers lost).

A white peace then? Indemnities? Colonies returned to Germany? Tariff limits? The Ottomans? Italy? The Balkans?

There are oodles of factors in play here, all of which can effect a post-war Britain economically, politically, socially, etc. You can't just say "Herp, war ends in 1917, nothing much changes, derp". The situation is far too messy for something that simplistic.
 
A white peace then? Indemnities? Colonies returned to Germany? Tariff limits? The Ottomans? Italy? The Balkans?

There are oodles of factors in play here, all of which can effect a post-war Britain economically, politically, socially, etc. You can't just say "Herp, war ends in 1917, nothing much changes, derp". The situation is far too messy for something that simplistic.

Well, essentially, I'm trying to figure out what to do with the US for my Mitteleuropa TL, so you can see there.
 
The US government saves quite a bit of money, Veterans benefits for WWI vets, mainly medical and retraining, cost about a half billion a year, or 20% of the then Federal budget

Of course a lot of that was due to one of the most corrupt men in history running the place but I digress

Though the question becomes without this where does Charles R. Forbes end up instead and what kind of damage does he do?
 
Top