Effects on USA in case of early Central Powers victory

plenka

Banned
My idea goes like this, CPs manage an early victory before the US enters the war. How and why CPs won is not important here, I am interested what effects would it have on the US. What would be the effects on the economy, society and military of the country.

Would the great economic crisis of 1929 still happen? Would the US become more or less isolationist by result of them not entering the war?

Let us say that the war ends by March of 1917, so let us use that as an cut off date.

Do please be so kind and limit the discussion only to US, and US alone.
 
Great Depression arguably doesn't happen, or is not nearly as bad. A lot of surplus capacity was built up that led to overproduction in the 20's

US would probably be less isolationist, no backlash against the war, plus the European situation is less settled

In terms of Society, German is still the most popular second language and German-American culture is even stronger. Prohibition is possible but less likely without being preceded by War Prohibition. Socialism in the US is not destroyed during the war by the Palmer raids and the US is somewhat more left wing

In terms of the military the 1916 program gets laid down on schedule, 4 Colorados in 1917, 3 SoDaks each in 1917 and 1918 and the Lexingtons in 1918/1919. The Lexingtons are probably slower but better armored without getting the British Jutland data and just knowing that BCs blew up (OTL they said 30 knots minimum, every extra knot a plus with sufficient armor, Jutland data led them to judge 7" inclined sufficient leaving room for 33.25 knots, no data they probably err on the side of caution). This basically kills the Washington Naval Treaty in its OTL form dead right there

US probably gets involved in Mexico again in 1917, Wilson wanted to do so but Carranza threatened to torch the oil fields that supplied a big chunk of Entente oil if the US tried anything, if US not in the Entente that is much less of a threat
 
I recall reading somewhere that Wilson thought a CP victory would mean the end of America's liberal economic and political order, that America would have to abandon having a tiny, underequipped Army to one far larger and most likely fully equipped. For example in 1914 the US Regular Army had 4 divisions in CONUS and Brigades in Hawaii, Philippines, Alaska as well as other garrisons, but had only 6 regiments of artillery, one each in Hawaii and Philippines and the other 4 for the 4 divisions in CONUS. Similarly the CONUS units were at a Peace manning establishment with 65 men in an infantry company rather than the 150 men as per the War establishment. As for the Navy, while it had a lot of battleships is was seriously unbalanced with a lack of cruisers and destroyers. The National Guard, like the Regular Army, lacked the artillery that its infantry and cavalry strength would dictate, as well as not spending a lot of time on training.

This is the sort of thing Wilson feared that if the CP won the US could not get away with. Even in before the 1916 Defence Act authorised large increases to the RN, NG and Navy the NG was filling out its establishment as a result of the trouble in Mexico and the War in Europe. There had been plans in 1914, not acted upon, that each RA division should have two artillery Brigades with a mix of field gun and howitzer batteries but with a mere 6 Regular artillery regiments this was a pipe dream.

In the event of a CP victory that occurred before the US could intervene this sort of hollowed out military/naval force would have to stop. Even if the number of Divisions and Brigades in the RA and NG they would have to be properly equipped with enough artillery and ammunition stockpiles similar to those of the Europeans. Plans would have to be put in place that the increase from 65 man peace establishment to 150 war establishment infantry companies could be realised in short order like the Europeans and the NG would have to step up its training. The Navy would have to get enough cruisers and destroyers to properly balance its fleet rather than relying on a rapid wartime expansion.

All of this and more would cost money, which would mean an increase in taxation, and if the men can't be found by existing voluntary means (which had proven to be totally ineffective in creating an Army Reserve) then some means of compulsion such as the draft or reward such as a civil service job after military service will have to be found. Federal money to fund NG training and equipment and legislation regarding its use will alter the balance of power with the States, which won't be particularly welcome. Once these plans are put in place then it will be difficult for US leaders to resist the urge to utilise this military force, in an era when the US would intervene in Latin America at the drop of a hat.

When you add it all up its easy to see why Wilson was concerned about a CP victory's affect on America.
 

BlondieBC

Banned
  • Relations with Germany remain worse than prewar due to Lusitania.
  • German is still a major second language in the USA.
  • US never expands it army like in OTL WW1. We remain a nation with a great power navy and at best a second class power army.
  • We don't have financial issues, so we probably don't join naval limitation treaties. US may have most powerful navy in the world.
  • Puerto Rico residents not made citizens.
  • With UK and German trade zones becoming protectionist, the USA may well want to keep its colonies. Also, we probably treat Latin America even more like colonies. And if our navy is more powerful than UK, I would not rule out US southern expansion.
  • USA probably stays on gold standard.
  • USA/Japanese relations still go into toilet.
  • USA/Russian relationship much better under White government.
  • US will never run up huge war debts. We will have a recession after WW1 ends due to not selling so much arms and goods to warring parties.
 

BlondieBC

Banned
How would the relationship change between America and the Kaiserreich over he years?

It could go either way. USA is slightly anti-German at the end of the war. Slightly pro-British. Very anti-Japan. Slightly pro-Italian. So let's take a simple but likely scenario. Japan does something in China the USA does not like. Does the UK support the USA, support Japan, or stay neutral? Depending upon how you answer lots of questions like this, you get different outcomes. Another questions. Does German keep some colonies. If so, does the Kaiser allow US preferential access to markets?
 

trajen777

Banned
The basics would as i see it would / could be :
1. Germans win in 16 - 17
2. Kaiser had promised a much more democratic situation in Germany (that is how the socialists were convinced to support the war) so that will happen
3. Germany will be exhausted and would have to make many cuts in its military
4. France and UK would be bankrupt and Germany would not be able to get money form them
5. The biggest issue would be the USA will not be able to collect (or have a difficult time ) from the massive debt incurred from the allies
 
The basics would as i see it would / could be :
1. Germans win in 16 - 17
2. Kaiser had promised a much more democratic situation in Germany (that is how the socialists were convinced to support the war) so that will happen
3. Germany will be exhausted and would have to make many cuts in its military
4. France and UK would be bankrupt and Germany would not be able to get money form them
5. The biggest issue would be the USA will not be able to collect (or have a difficult time ) from the massive debt incurred from the allies

If Germany looked like it was going to win the war then American banks and companies would stop loaning the Entente money without having colateral to back it. So I dont think collecting on Entente loans is going to have to happen without just seizing British or French owned property that was used to back the loans made first.
 
5. The biggest issue would be the USA will not be able to collect (or have a difficult time ) from the massive debt incurred from the allies
At this point the debt owed to the US was mostly secured, so the US just seizes the collateral, it's only when the US entered the war that the majority of its loans were not secured
 
If the banks suddenly withdrew their loans from Great Britain and France, that would incur a major economic crisis, would it not?
 
The basics would as i see it would / could be :
1. Germans win in 16 - 17
2. Kaiser had promised a much more democratic situation in Germany (that is how the socialists were convinced to support the war) so that will happenO
3. Germany will be exhausted and would have to make many cuts in its military
4. France and UK would be bankrupt and Germany would not be able to get money form them
5. The biggest issue would be the USA will not be able to collect (or have a difficult time ) from the massive debt incurred from the allies
OP asks for an early win. I really doubt he meant "early" as in a 1917 win where Germany is exhausted. He most likely means Schlieffen Plan works or a decisive German victory at the First Ypres
 
Realistic German victory scenarios are early victories. Either the Germans deal a crushing blow at the Marne or, the most plausible, Italian entry on the CP side or neutrality. Its hard to get a victory with a long war even if the US stays out.

From that we deduce the following:

Germany and the continent will be in much better economic shape. They will not have spent years tearing their economies apart and the spending on the war will be much less

Germany will take advantage of the war to achieve economic hegemony over Europe probably by forcing the vanquished into a trading bloc. This will mean America will have to overhaul its economic model by lowering trade barriers or being excluded from Europe.

the first would lead t o an economic boom the second would leave America an economic basket case

America will never be able to compete with the German trading bloc and chances are America gives up any global power aspeerations. Best hope would be to retain Western Hemisphere semi-hegemony but even that will be challenged

If America throws in the towel and doesn't try to match German armaments, prosperity. If it tries an arms race, defeat and bankruptcy
 

BlondieBC

Banned
The basics would as i see it would / could be :
1. Germans win in 16 - 17
2. Kaiser had promised a much more democratic situation in Germany (that is how the socialists were convinced to support the war) so that will happen
3. Germany will be exhausted and would have to make many cuts in its military
4. France and UK would be bankrupt and Germany would not be able to get money form them
5. The biggest issue would be the USA will not be able to collect (or have a difficult time ) from the massive debt incurred from the allies

The debt is secured by assets in the USA. There is not collection problem in the ATL here.
 

BlondieBC

Banned
If the banks suddenly withdrew their loans from Great Britain and France, that would incur a major economic crisis, would it not?

It is useful to go through the process of what happened financially. For the first 3-6 months of the war, no one took the possibility it would be a long war seriously. Ships are continuing the prewar practice of settling up each leg of the journey with gold in the hold. For example, if a Manchester to NYC ship load 200,000 USD more of goods than it unloads, it also leaves behind 10,000 ounce of gold. You can read about a German merchant ship trapped in Bar Harbor main for a fascinating example of this practice. Ships are starting to get sunk, a little at least. UK is not export goods, so gold flows are unfavorable. Roughly six months into the war, the UK addresses this issue. March 1915 comes to mind, but it could have been another month. If you are a British citizen, you have to sell all assets in the USA to the British government for paper bonds that are only repayable after the war. Fairly long duration bonds. The assets having to be sold included all real estate, bonds, and stock owned in the USA. The British government then begins what becomes the two year process of liquidating these assets. JP Morgan was the main agent, but there had to be a lot more. So say there was a cattle ranch in Texas. An US agent working for the UK would sell this ranch to an American. The funds are deposit in JP Morgan Bank. When the ship is loaded with cargo, JP Morgan will settle the difference. No gold has to be moved. IOTL, the USA would do similar action with War Bonds that would partially lead to the partial default by FDR. ITTL, the USA has no issues. Excluding the initial time period, there is no large transfer of currency (gold and silver) to the USA, just a massive change in ownership of property. I guess the best way to describe it in modern times would be take an ASB scenario. Imagine that if over 2 years, everything owned in the USA by both China and Japan is transferred to an American for existing exports sold at 6 times market value. After, two years, this ends since all the assets are used up. You get a sharp but short USA recession, and then things go back to a good place.

Included in these debts was a very large net debt from the USA to the UK still around from the civil war. The USA also ran a sustained trade surplus with the UK in things such as food, minerals, and other trade goods. The net effect is that the USA was exporting food and raw materials to the UK as interest payments on the US Civil War. All these bonds/stocks are used up, and the UK has a massive issue that it can't pay for the food and raw materials it needs so badly post war. So ITTL, the USA will largely get locked out of the UK trade zone due to the lack of exports/gold in the UK trade zone to pay for US imports. The UK is a two currency system much like OTL Soviet Union. The UK paper money will not be accepted outside the UK, so the UK can only buy with gold/silver/USD. The UK, of course, can buy unlimited amounts in its empire because it can fiat the paper money as real money.

The German trade zone is harder to predict, but it is also likely protectionist. And there is a good chance that the German zone has no colonies. There will be a tendency for the world to split into at least three trade zones. British Empire, German Zone, and US Zone. What France does is hard to call. It could be a part of the British Zone, German Zone, or its own Zone. Russia is another hard call. As is China, which to me, looks like a likely place for a major war.
 
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