Trade effect on WWI w/true neutral USA

Inspired by this thread:
https://www.alternatehistory.com/discussion/showthread.php?t=249143

Like the title says, what would happen to world trade if the USA had truely been neutral in WWI right from the start.

The UK announced their blockade of Germany:
http://en.wikipedia.org/wiki/Blockade_of_Germany

And then Germany announced their blockade of the UK:
http://en.wikipedia.org/wiki/U-boat_Campaign_(World_War_I)

And now the USA sees that her trade with Europe is going down the drain no matter what.

So, for a PoD, the USA does something different and tries equal trade with all parties.

I am open for suggestions as to what kind of alternative trade the USA might propose and conduct, keeping in mind that in this thread the USA is not going to join the allies (or the CP) but will remain true neutral.

Along these lines I was thinking that what they start off with will likely evolve to something else as the war stretches and the situation becomes worse and worse. My suggestions would be to start off with an insisting that food will be allowed to be shipped to all combatants in american hulls, and in exchange for this, every nation will be allowed to trade for whatever else they want. Everything else but foodstuffs will be carried in the combatants own ships, and will be safe only until they exit american waters. Later, as the civilian population starts to suffer, perhaps the US insists that medicines, surgical equipment, supplies, and personnel are to be allowed in, and eventually refugees and disabled soldiers can be hauled off to the USA for the duration of hostilities.

My thinking is that this kind of trade might have some interesting effects on the war, and that is the main reason I am asking for this discussion.

For instance, what if the USA objects to the UK blockade and gets agreement that food can pass? And if not, what if the US severs all trade to Europe for the duration? This would mean that either the USA is free to trade foodstuffs with all, or no trade will be conducted (reguardless of where or in whose ships) with any combatant nation, for the duration.

Another thing, with URSW (assuming this still takes place), the US ships carrying foodstuffs will be required to travel with the stars and stripes painted prominently & brightly lit at all times, while sailing to and from European ports.

My questions are, when would these trade restrictions most likely start (right off, after a few months? A year?), and what would these ALT trade laws likely be?
 

BlondieBC

Banned
A lot depends on what you see as true neutral. Options in this range could include:

1) No trade with any warring party. Bad for business, so unlikely.

2) Ban USA ships going to entente ports, but allow neutrals/warring parties dock at USA. Ban USA citizens on ship going to war zone. Small impact on trade from OTL. German ship are in port. UK pulled ships to Europe, so lots of business for USA ships on abandoned routes.

3) Same as above plus ban Entente ships from USA ports.

4) Any option of above, add war tariff to any of the above.
 
The US can't try equal trade with all parties because of how blockades work. If the US tries to trade with Germany, the Royal Navy boards US ships to do so. If the US trades with Britain, U-Boats sink their ships - as they did IOTL.

Blockades need to be enforced. Britain is certainly going to do so. So will Germany. The difference is that Britain can enforce its blockade without sinking US ships or killing US citizens. Germany can't. The same dynamic applies as IOTL an eventually US declares war on Germany, or Germany refuses to sink US ships.

If the US says it considers submarine warfare to be considered an effective blockade, then it stops shipping to the Allies and the world economy heads into the toilet.
 
The US can't try equal trade with all parties because of how blockades work. If the US tries to trade with Germany, the Royal Navy boards US ships to do so. If the US trades with Britain, U-Boats sink their ships - as they did IOTL.

Blockades need to be enforced. Britain is certainly going to do so. So will Germany. The difference is that Britain can enforce its blockade without sinking US ships or killing US citizens. Germany can't. The same dynamic applies as IOTL an eventually US declares war on Germany, or Germany refuses to sink US ships.

If the US says it considers submarine warfare to be considered an effective blockade, then it stops shipping to the Allies and the world economy heads into the toilet.

Not exactly.

As far as I know back then only a close blockade of ports was considered legal? And the number of forbidden cargoes for neutral merchant ships was limited too? Food for instance wasn´t forbidden.

Because for a large part the British Empire wanted to keep its options open. The far-range blockade and the inclusion of practically everything in the blockade only happened because the Royal Navy (might makes right) introduced it in 1914.

And the USA chose to accept that new definition.
The USA - as the most powerful neutral country back then - might have simply insisted on equal treatment for neutral ships.
- Neutral ships carrying food won´t be bothered
- The British can´t add - on their own - new stuff to the contraband list.

Either accept it or we won´t deal with you. Given the reliance of the British isles on American goods, I suspect the British Empire would have accepted it?
 
Hey, you broke that down way better than I did. Good input.:)
A lot depends on what you see as true neutral. Options in this range could include:

1) No trade with any warring party. Bad for business, so unlikely.
I have to agree here, but if all else fails...:eek:

2) Ban USA ships going to entente ports, but allow neutrals/warring parties dock at USA. Ban USA citizens on ship going to war zone. Small impact on trade from OTL. German ship are in port. UK pulled ships to Europe, so lots of business for USA ships on abandoned routes.
This would keep US ships safe from attack, but would be in effect trading with the Entente alone because the Germans and her allies cannot get to the US ports because of the blockades. Although technically neutral in form, this would in effect say that the UK blockade was ok, and tough luck to you Germany. Still, this is a quite likely possibility.

3) Same as above plus ban Entente ships from USA ports.
Now that would be leveling the playing field, and would be in keeping with true neutrality. Still bad for buisness, but hey.

4) Any option of above, add war tariff to any of the above.
I like this one!:cool:





This seems to assume that some underlining facts do not change, but the purpose I had in making this thread is to change these underlining facts, so we get to explore alternatives to the OTL trade during WWI. Lets see now...
The US can't try equal trade with all parties because of how blockades work. If the US tries to trade with Germany, the Royal Navy boards US ships to do so. If the US trades with Britain, U-Boats sink their ships - as they did IOTL.
This explains how the OTL blockades worked, and I have no problem with that. OTOH, this thread is about what would have happened if the USA choose not to accept {at the very least} foodstuffs as war contraband.

Blockades need to be enforced. Britain is certainly going to do so. So will Germany. The difference is that Britain can enforce its blockade without sinking US ships or killing US citizens. Germany can't. The same dynamic applies as IOTL an eventually US declares war on Germany, or Germany refuses to sink US ships.
This is true, but please read to the end of this post, as I think that taking an example from BlondieBC will make things clearer and easier to understand.

If the US says it considers submarine warfare to be considered an effective blockade, then it stops shipping to the Allies and the world economy heads into the toilet.
:)
But what does the USA do then, and what effect will this have on the Entente war economies and war effort?




Not exactly.
As far as I know back then only a close blockade of ports was considered legal? And the number of forbidden cargoes for neutral merchant ships was limited too? Food for instance wasn´t forbidden.
I am no expert on this topic, but I do know from things I have read online that the food was a new and controvercial aspect of the UK blockade.

Not exactly.Because for a large part the British Empire wanted to keep its options open. The far-range blockade and the inclusion of practically everything in the blockade only happened because the Royal Navy (might makes right) introduced it in 1914.
Yep. Another thing that could be a motivating force for the USA to reject the harshness of the UK blockade is the losses they are to be taking in their trade with Germany, just because the UK wants to starve another of Americas major trading partners into submission.

Not exactly.
And the USA chose to accept that new definition.
The USA - as the most powerful neutral country back then - might have simply insisted on equal treatment for neutral ships.
- Neutral ships carrying food won´t be bothered
- The British can´t add - on their own - new stuff to the contraband list.
Pretty sure this is accurate, and thanks for the input.

Either accept it or we won´t deal with you. Given the reliance of the British isles on American goods, I suspect the British Empire would have accepted it?
I have to agree, and I wonder if the initial demands were something the UK expected the USA to object to, and expected to be negoiated down from?

Ok, so for this ATL, lets take this a a working departure suggestion for what important changes come in right at the start, to maximize their effect and for the sake of discussion.

Ok, so now I am going to test out a brief list:
1) UK imposes unpressadentedly harsh blockade.
2) Germany responds the very next day with their blockade.
3) USA announces their accpetance of the legality of both blockades, but not with respect to foodstuffs.

Negotiations begin with the embassies of all concerned parties, and the USA proposes that her ships will be allowed to carry cargoes of foodstuffs to all parties (thus offsetting, to a very small degree, the losses to her trade), but such ships will not travel "blacked out" but rather brightly lit so as to be clearly visible and easily identifiable as an American ship carrying foodstuffs. The USA ships will not travel in company with other nations shipping (for obvious reasons), nor will faking USA markings be tolerated.

So,

1) USA ships will carry foodstuffs to all nations, and all nations merchantmen are welcome in America's ports. Foriegn ships can buy and transport any goods they choose, and will be protected in American waters by the US navy. Once outside US waters, they are on their own.

2) Nations that do not accept these conditions to the USA recognizing their blockades, will not be allowed to have any trade (their ships will be banned from US waters, or be interned for the duration) with the USA.

3) The USA announces the creation of a "Neutral Zone" outside of American waters, which excludes all foriegn warships. The rational is that the temptation to wait just offshore of the US coast might prove to tempting for some navies to resist an easy captur/kill of opposing merchant shipping. This being a probable necessity as the war progresses, to enforce American neutrality. This 'Neutral Zone" should be extensive, yet limited. It should be large enough to allow a merchant ship to safely sail from a US port, but at the same time shouldn't get anywhere near the eastern half of the atlantic.

How is that?
 
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BlondieBC

Banned
I like this one!:cool:

If I could pick what the best policy for the USA would be, I would pick.

1) Sell to all sides.

2) Ban USA ship from traveling to ports of nations at war. And passengers. It sounds like a big restriction, but you can simply unload the Entente goods in Spain or Italy for early days.

3) The USA Army was a joke. It was clear we needed larger, so push the National Guard up to about 1.5 million, and 0.5 in the army, to go down to 0.25 after the war is over. Now how to get the money. Also, the Navy second to none type act.

4) Pass a tariff bill to fund the military. Set some minimum tariff on war products of 25%, and allow the president to raise to level to high enough to balance the budget. And allow the president to adjust based on how well nations observe the USA view on law of the sea. So for example, if the UK started added to contraband list, and they likely do, then just jack their tariff up to 50%. Start blacklisting, it is now 75%. Don't get too attached to the exact %'s, you have to find level that buys all the guns for 2 million men, and quite a few BB and BC. You can't really hoard money back then due to nature of Gold or you cause a bad worldwide recession.

5) I would try to buy important but low-population land masses from the UK. Such as Bermuda would help USA defense. Bahamas have value as do low population areas of Northern Canada. Might also be looking at extra territorial RR and road to Alaska.

6) Profit.



But what does the USA do then, and what effect will this have on the Entente war economies and war effort?

World economy is no worse than OTL due to USA not sending ships. What would happen is the USA ships over time would take over Pacific, Indian Ocean, and South Atlantic routes, and the UK would pull even a higher % of its ships to only trade with the UK. When combined with punitive tariffs to the UK for the blockade, Germany likely leaves the USA ships alone.

Now one red line event would be the UK EVER flying the USA flag. Just tell them straight up, if you fly the USA flag to confuse the Germans, trade ends, and I will SEIZE all UK assets in the USA as payment for the damages. Combined with USA ships not going to France and UK proper, the Germans should leave us alone.

Ok, so for this ATL, lets take this a a working departure suggestion for what important changes come in right at the start, to maximize their effect and for the sake of discussion.

Ok, so now I am going to test out a brief list:
1) UK imposes unpressadentedly harsh blockade.
2) Germany responds the very next day with their blockade.
3) USA announces their accpetance of the legality of both blockades, but not with respect to foodstuffs.

Negotiations begin with the embassies of all concerned parties, and the USA proposes that her ships will be allowed to carry cargoes of foodstuffs to all parties (thus offsetting, to a very small degree, the losses to her trade), but such ships will not travel "blacked out" but rather brightly lit so as to be clearly visible and easily identifiable as an American ship carrying foodstuffs. The USA ships will not travel in company with other nations shipping (for obvious reasons), nor will faking USA markings be tolerated.

So,

1) USA ships will carry foodstuffs to all nations, and all nations merchantmen are welcome in America's ports. Foriegn ships can buy and transport any goods they choose, and will be protected in American waters by the US navy. Once outside US waters, they are on their own.

2) Nations that do not accept these conditions to the USA recognizing their blockades, will not be allowed to have any trade (their ships will be banned from US waters, or be interned for the duration) with the USA.

3) The USA announces the creation of a "Neutral Zone" outside of American waters, which excludes all foriegn warships. The rational is that the temptation to wait just offshore of the US coast might prove to tempting for some navies to resist an easy captur/kill of opposing merchant shipping. This being a probable necessity as the war progresses, to enforce American neutrality. This 'Neutral Zone" should be extensive, yet limited. It should be large enough to allow a merchant ship to safely sail from a US port, but at the same time shouldn't get anywhere near the eastern half of the atlantic.

How is that?

You need to do more research. For a TL you need to understand the Always contraband, conditional contraband, and Ok to trade categories. You also need to understand the USA and UK position regarding these issues. Also, Germany did not and would not respond day one. Also, you should look up the work Hoover did in the war.

And, O BTW, Colonel House has to go.
 
one question in all of this... even if the USA could get all the warring states to agree to allow all food shipments, how long could they afford to pay for it? Weren't all the warring nations hovering on bankruptcy towards the end? I'd think a truly neutral USA wouldn't accept anything but cash, no credit terms, etc...
 
got a good point there, sales to warring parties would very likely only be cash & carry. And no loans to warring parties either.

In otl 1917 the british were running out of possibilities for secured loans.
But without even secured loans thats going to restrict the war considerable for the entente. On the other hand they might try to find ways within the dominion.
(thus in the pound zone) and so it might actually turn out better for the british.
Chances of winning for the entente drop considerable though. And under these conditions i could see them accepting a negotiated peace much earlier.
 

BlondieBC

Banned
one question in all of this... even if the USA could get all the warring states to agree to allow all food shipments, how long could they afford to pay for it? Weren't all the warring nations hovering on bankruptcy towards the end? I'd think a truly neutral USA wouldn't accept anything but cash, no credit terms, etc...

We know the UK lasted until early 1917. Germany had substantial resources, such as securities in the USA or merchant ships stuck in neutral ports, so they could buy substantial amounts of USA goods. If we assume the price stays the same, both sides are likely buying well into 1918 since the UK will not be able to buy as much. Now the unknown is where the price goes on things such as food, which could be much, much higher in this ATL. A hungry/starving man will pay almost anything for food.

And the Germans had some things such as dies which could be re-exported to the USA. I am not sure the amount is particularly large compared to the USD needed.

I agree with Wietze the war is likely shorter if any significant amount of supplies get to Germany.
 
True neutral trade with Germany after 1914 is impossible for the good reason that naval German commerce did not exist. That means the USA has to go to war with the Allies for the benefit of an absolute monarchy the USA had zero love or respect for.
 
1) USA ships will carry foodstuffs to all nations,

After the 1916 harvest (a very poor one, nearly 45% down on the previous year) there is also the option of not exporting foodstuffs at all, on the grounds that America has only enough for her own needs.

This was probably not going to happen under Wilson, who had been re-elected primarily by the farmers. Had Hughes got in by the votes of the industrial North, it could have becomes a serious possibility.
 

BlondieBC

Banned
True neutral trade with Germany after 1914 is impossible for the good reason that naval German commerce did not exist. That means the USA has to go to war with the Allies for the benefit of an absolute monarchy the USA had zero love or respect for.

Germany was a constitutional Monarchy as was the UK, Italy and A-H. The Tsar is an absolute Monarchy, or at least much closer than the CP.

The USA had many German-Americans, so it is not so one sided. And the USA could trade with neutrals who re-export to Germany over land.
 
Germany was a constitutional Monarchy as was the UK, Italy and A-H. The Tsar is an absolute Monarchy, or at least much closer than the CP.

The USA had many German-Americans, so it is not so one sided. And the USA could trade with neutrals who re-export to Germany over land.

To call Germany a constitutional monarchy but Russia absolutist means either absolutism is meaningless or people are bending over backwards to present Russians as despotic while obscuring the degree to which both Germany and Austria-Hungary were just as autocratic and neo-feudal as Russia itself was. Germany officially had a constitution, so did Russia. Austria-Hungary had a byzantine division on ethnic lines, so did Russia. Germany and Austria-Hungary had legislatures, so did Russia. If we're going to call them constitutional, then so was Nicholas II a constitutional monarch.

Otherwise, if we stick to what words mean, as opposed to what we want them to mean, Germany was an absolute monarchy, proud of it, and fell apart at the seams like Austria-Hungary and Russia because dynastic autocracy and modern war don't mesh very well. A factor that true US neutrality still doesn't affect because Germany doesn't have sea trade after 1914.
 
what i wonder about is how a true neutral us would handle loans.
I recall reading that wilson wanted to limit the loans by 1916.
So a true neutral us might not be willing to loan money.
So in order to get money the entente has first to use up their reserves, and then start selling off things.the problem here would be that any potential buyer would know in how much of a tight spot they are, so pay absolute minimum prices. So they would get a very bad return for their possessions.

but utterly doubt if the UK would be selling off land, the americans just suggesting the sale of some canadian land would make the uk look at them with lots of suspicion.
 

BlondieBC

Banned
To call Germany a constitutional monarchy but Russia absolutist means either absolutism is meaningless or people are bending over backwards to present Russians as despotic while obscuring the degree to which both Germany and Austria-Hungary were just as autocratic and neo-feudal as Russia itself was. Germany officially had a constitution, so did Russia. Austria-Hungary had a byzantine division on ethnic lines, so did Russia. Germany and Austria-Hungary had legislatures, so did Russia. If we're going to call them constitutional, then so was Nicholas II a constitutional monarch.

Otherwise, if we stick to what words mean, as opposed to what we want them to mean, Germany was an absolute monarchy, proud of it, and fell apart at the seams like Austria-Hungary and Russia because dynastic autocracy and modern war don't mesh very well. A factor that true US neutrality still doesn't affect because Germany doesn't have sea trade after 1914.

Germany had a Reichstag going back decades with real budgetary powers. Other powers were in the second chamber of the parliament. It is much more similar to the UK system of government in 1909 than the Tsar of 1914. Germany actually had less power in the hands of the Nobles in 1909 than the UK did, and the 1910 reforms gave the UK a bit of a lead in being more democratic.

A-H parliaments also had power as show by the underfunding of the Army due to the Hungarian parliament tactics. A-H had many disfunctional elements, but that does not make it an absolute Monarchy.


Do you even know what an absolute Monarchy is? It is where the Monarch has all power, not some power. Where a monarch has some power but is limited by a written or unwritten constitution is a constitutional monarchy.
 

BlondieBC

Banned
what i wonder about is how a true neutral us would handle loans.
I recall reading that wilson wanted to limit the loans by 1916.
So a true neutral us might not be willing to loan money.
So in order to get money the entente has first to use up their reserves, and then start selling off things.the problem here would be that any potential buyer would know in how much of a tight spot they are, so pay absolute minimum prices. So they would get a very bad return for their possessions.

but utterly doubt if the UK would be selling off land, the americans just suggesting the sale of some canadian land would make the uk look at them with lots of suspicion.

The UK seized all UK citizens assets in the USA about a year into the war and liquidated these assets to buy war goods, so not much would change under this ATL. The fire sales would be about what we see IOTL.

In most ATLs, the UK would never consider selling land to the USA. A peace deal with Germany would look better since they are trading French and perhaps some Belgium lands for peace, not parts of the empire.
 

Grimbald

Monthly Donor
None of the warring partiew would have wanted to sell land but parting with non strategic assets vs starvation is not a difficult choice.

The US would have been interested in:

French Islands off Canada
French Islands in Caribbean
French Islands in Eastern Pacific

German Samoa

Artic Canada
Newfoundland
Bahamas
Bermuda
Falkland Islands
British Virgin Islands

All these areas were relatively sparcely populated and not "ego" items for the selling party.

If Germany could have gotten title to Greenland the US would have been interested there too.
 
None of the warring partiew would have wanted to sell land but parting with non strategic assets vs starvation is not a difficult choice.

The US would have been interested in:

French Islands off Canada
French Islands in Caribbean
French Islands in Eastern Pacific

German Samoa

Artic Canada
Newfoundland
Bahamas
Bermuda
Falkland Islands
British Virgin Islands

All these areas were relatively sparcely populated and not "ego" items for the selling party.

If Germany could have gotten title to Greenland the US would have been interested there too.


As the dominions were self governing the Governments in Canada and Newfoundland would have objected, and at the time Canada's army was larger than the US's. Not to mention the British needed the Canadian Grain to keep the populus fed.
 
We seem to be drifting a bit here. I'll answer these posts as best I can and invite anyone with good, hard facts to post them (or a link to their source) for the good of the thread.

Hmmm.

one question in all of this... even if the USA could get all the warring states to agree to allow all food shipments, how long could they afford to pay for it? Weren't all the warring nations hovering on bankruptcy towards the end? I'd think a truly neutral USA wouldn't accept anything but cash, no credit terms, etc...
got a good point there, sales to warring parties would very likely only be cash & carry. And no loans to warring parties either.

In OTL 1917 the british were running out of possibilities for secured loans.
But without even secured loans thats going to restrict the war considerable for the entente. On the other hand they might try to find ways within the dominion.
(thus in the pound zone) and so it might actually turn out better for the british.
Chances of winning for the entente drop considerable though. And under these conditions i could see them accepting a negotiated peace much earlier.

I cannot give an informed opinion on how long the combatants could have paid for food, other than to say that it would not be less than in OTL unless they forced the USA to cut off trade altogether, in which case they would have to grow their own.

It seems to me that trade with the USA may have prolonged the war at the least, if not changing the outcome entirely.

So, the proposed idea is that the USA will ship in American hulls foodstuffs to all (I have not gotten around to proposing what cargo they are going to be returning with), while leaving all other cargoes to be carried in the combatants hulls, and at their own risk. One the matter of finance, I really haven't given that much thought, as I was primarily concerned with whose ships were going where with what cargoes.

I posed a blockade TL (with addmittedly improbable implementation dates) and would like to see some other (better) proposals for when things get interesting. I order to take a look at all the effects of an ATL USA neutrality, lets at least have the UK/German blockades, and the US counter, take place in the first year. This would bring us to fall of 1915, with all the trade restrictions in place.

So, can we all agree to a fall 1915, with the US recognizing both the UK and German blockades, or is there a better time for this to have come about? Open to suggestions here guys.

And if we do go with mine, just how long will this last before somebody decides to violate our neutrality? If it is the Entente, then they forfiet all trade with the USA, and have to beat the CP on their own. If the Germans violate US neutrality (which would be crazy, as American ships are known to be carrying only foodstuffs), they they would forfiet their own foodstuffs, and would at the least see the USA conducting full trade with the Entente, if not joining the war as OTL.

SO, where are we at with respect to ides for how the ATL trade is structured, when the blockades go into effect and whatnot?
 
One thing I should probably point out here.

If the USA is trading food to the CP in American hulls, but the CP are restricted to all other cargoes to being hauled by their own merchantmen (which have to try to run the Entente blockades), then this for all intents and purposes will mean that only the foodstuffs will reach them.

On the other hand, if the Entente trys to blockade these food shipments, they we be costing themselves all such food shipments AND all other cargoes carried by their merchantmen.

In OTL the CP basically got little to nothing from the USA in trade, right?
In this ATL, the Entente will still be getting most of what they historically did, but the CP will not starve.

What effect does this have on the war?
 
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