Hugh Rockoff, Rutgers University

Although the United states was proactively involved in human being War ns for just nineteen months, native April 1917 to November 1918, the mobilization the the economy was extraordinary. (See the chronology at the finish for crucial dates). Over 4 million Americans served in the equipped forces, and the U.S. Economy turned the end a vast supply of raw materials and also munitions. The war in Europe, that course, began long prior to the United claims entered. On June 28, 1914 in Sarajevo Gavrilo Princip, a young Serbian revolutionary, shot and killed Austrian Archduke Franz Ferdinand and also his mam Sophie. A couple of months later on the an excellent powers the Europe were at war.

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Many Europeans gotten in the war reasoning that win would come easily. Few had the understanding shown by a 26 year-old conservative Member that Parliament, Winston Churchill, in 1901. “I have typically been astonished to hear through what composure and also how glibly Members, and even Ministers, talk of a europe War.” that went on to suggest out that in the past European wars had been battled by tiny professional armies, but in the future huge populations would be involved, and he predicted that a European war would finish “in the ruin of the vanquished and the scarcely much less fatal advertisement dislocation and exhaustion of the conquerors.”<1>

Reasons because that U.S. Entry into the War

Once the battle began, however, it became clear the Churchill was right. By the moment the joined States entered the war Americans knew the the price of success would it is in high. What, then, impelled the United says to enter? What role did financial forces play? One factor was simply that Americans generally – some ethnic minorities to be exceptions – felt stronger ties come Britain and also France 보다 to Germany and also Austria. By 1917 it was clear that Britain and France were nearing exhaustion, and also there was considerable sentiment in the United claims for saving our timeless allies.

The insistence the the United claims on her trading rights was likewise important. Soon after the war began Britain, France, and also their allies collection up a naval blockade the Germany and Austria. Even food was contraband. The Wilson administration complained bitterly that the blockade violated global law. U.S. Firms took to using europe neutrals, such as Sweden, together intermediaries. Surely, the american argued, international law protected the right of one neutral come trade with another. Britain and France comment by prolonging the blockade to include the Baltic neutrals. The instance was similar to the obstacles the United says experienced throughout the Napoleonic wars, i m sorry drove the joined States into a quasi-war versus France, and to war against Britain.

Ultimately, however, the was not the conventional surface ar vessels supplied by Britain and also France to enforce that blockade that enraged American opinion, yet rather submarines provided by Germany. As soon as the british (who provided most the the blockading ships) intercepted one American ship, the ship to be escorted into a british port, the crew to be well treated, and also there was a opportunity of damages payments if that turned the end that the interception was a mistake. The instance was very different as soon as the Germans turned come submarine warfare. German submarines assaulted without warning, and also passengers had tiny chance of to conserve themselves. To numerous Americans this was a brutal violation that the legislations of war. The Germans feel they had actually to usage submarines due to the fact that their surface fleet to be too tiny to loss the British marine let alone develop an effective counter-blockade.

The very first submarine attack to inflame American opinion to be the sinking that the Lusitania in may 1915. The Lusitania left brand-new York with a cargo that passengers and freight, including war goods. When the ship was sunk over 1150 passengers were lost consisting of 115 Americans. In the month that followed further sinkings brought an ext angry warnings from president Wilson. Because that a time the Germans gave method and agreed come warn American ships before sinking them and also to conserve their passengers. In February 1917, however, the Germans renewed unrestricted submarine war in an attempt to starve Britain into submission. The ns of numerous U.S. Ships was a key factor in president Wilson’s decision to break diplomatic connections with Germany and to look for a explanation of war.

U.S. Entry right into the War and the prices of shed Trade

From a crude oil dollar-and-cents allude of see it is difficult to justify the war based on the trade lost to the unified States. U.S. Exports to Europe increased from $1.479 exchange rate dollars in 1913 come $4.062 billion in 1917. Intend that the unified States had actually stayed the end of the war, and also that together a an outcome all trade v Europe was reduced off. Expect further, the the resources that would have been used to produce exports for Europe were able to develop only half as much value as soon as reallocated to other purposes together as creating goods for the domestic market or exports because that non-European countries. Then the lose of output in 1917 would have been $2.031 billion per year. This was around 3.7 percent that GNP in 1917, and only about 6.3 percent that the complete U.S. Price of the war.<2>

On march 21, 1918 the Germans released a massive offensive top top the Somme battlefield and successfully broke through the ally lines. In May and early June, after ~ U.S. Entry right into the war, the Germans complied with up v fresh attacks that brought them within fifty mile of Paris. Although a small variety of Americans participated it was mainly the old war: the Germans against the British and also the French. The come of big numbers that Americans, however, rapidly adjusted the food of the war. The transforming point was the second Battle that the Marne fought in between July 18 and also August 6. The Allies, bolstered by far-reaching numbers of Americans, halted the German offensive.

The initiative currently passed to the Allies. They drove the Germans ago in a collection of strikes in which American troops play an increasingly important role. The an initial distinctively American attack was the fight of the St. Mihiel Salient battled from September 12 come September 16, 1918; over fifty percent a million U.S. Troops participated. The last major offensive the the war, the Meuse-Argonne offensive, was released on September 26, v British, French, and also American pressures attacking the Germans ~ above a broad front. The Germans now realized that their military instance was deteriorating rapidly, and that lock would need to agree to finish to the fighting. The Armistice arisen on November 11, 1918 – at the eleventh hour, the the eleventh day, of the eleventh month.

Mobilizing the Economy

The first and most necessary mobilization decision was the dimension of the army. As soon as the united States gone into the war, the military stood in ~ 200,000, hardly enough to have a decisive impact in Europe. However, on may 18, 1917 a draft was imposed and the number were raised rapidly. Initially, the expectation was the the United states would mobilize an army of one million. The number, however, would go lot higher. In its entirety some 4,791,172 Americans would serve in civilization War I. Some 2,084,000 would certainly reach France, and 1,390,000 would see active combat.

Once the dimension of the army had to be determined, the requirements on the economy became obvious, back the way to meet them go not: food and also clothing, guns and also ammunition, locations to train, and the way of transport. The Navy also had come be broadened to defend American shipping and also the convoy transports. Contracts instantly began flowing from the Army and Navy to the exclusive sector. The result, that course, was a rapid rise in federal spending native $477 million in 1916 come a peak of $8,450 million in 1918. (See Table 1 listed below for this and other data top top the war effort.) The latter number amounted to over 12 percent the GNP, and that amount excludes security by other wartime agencies and spending by allies, lot of which to be financed by U.S. Loans.

Table 1Selected economic Variables, 1916-1920
1. Industrial production (1916 =100)100132139137108
2. Profits of the federal federal government (millions the dollars)$9302,3734,3885,8896,110
3. Expenditure of the federal government (millions of dollars)$1,3337,31615,58512,4255,710
4. Army and Navy safety (millions the dollars)$4773,3838,5806,6852,063
5. Share of money, M2 (billions the dollars)$20.724.326.230.735.1
6. GNP deflator (1916 =100)100120141160185
7. Gross national Product (GNP) (billions of dollars)$
8. Real GNP (billions that 1916 dollars)$
9. Average annual earnings per permanent manufacturing employee (1916 dollars)$751748802813828
10. Complete labor force (millions)40.141.544.042.341.5
11. Army personnel (millions).174.8352.9681.266.353
Sources through row:

1. Miron and also Romer (1990, table 2).

2-3. U.S. Bureau of the Census (1975), collection Y352 and Y457.

4. U.S. Office of the Census (1975), collection Y458 and Y459. The estimates are the typical for budget year t and fiscal year t+1.

5. Friedman and Schwartz (1970, table 1, June dates).

6-8. Balke and also Gordon (1989, table 10, pp. 84-85).The original series were in 1982 dollars.

9. U.S. Office of the Census (1975), series D740.

10-11. Kendrick (1961, table A-VI, p. 306; table A-X, p. 312).

Although the army would number in the millions, raising these number did not prove to it is in an unmanageable load for the U.S economy. The full labor pressure rose from about 40 million in 1916 to 44 million in 1918. This increase enabled the United states to field a huge military when still enhancing the labor pressure in the nonfarm private sector from 27.8 million in 1916 to 28.6 million in 1918. Real wages climbed in the industrial sector during the war, probably by 6 or 7 percent, and also this increase linked with the ease of finding work-related was adequate to attract many additional workers right into the labor force.<3> numerous of the guys drafted into the armed forces to be leaving school and would have been beginning the labor pressure for the an initial time in any kind of case. The farm yard labor force did drop slightly from 10.5 million in 1916 to 10.3 million employees in 1918, yet farming contained many low-productivity workers and also farm calculation on the entirety was sustained. Indeed, the all-important classification of food seed showed strong increases in 1918 and 1919.

Figure 1 shows manufacturing of steel ingots and “total commercial production” – an table of contents of steel, copper, rubber, petroleum, and also so on – monthly from January 1914 with 1920.<4> that is apparent that the unified States accumulated its volume to turn out these basic raw materials throughout the years of U.S. Neutrality when Britain and also France to be its purchase supplies and also the United claims was beginning its very own tentative construct up. The United claims then simply maintained the calculation of these materials throughout the years of energetic U.S. Involvement and concentrated on turning these materials right into munitions.<5>

Figure 1


Prices on the brand-new York share Exchange, displayed in figure 2, carry out some understanding into what investors thought about the stamin of the economy throughout the war era. The upper line mirrors the Standard and also Poor’s/Cowles the supervisory board Index. The reduced line mirrors the “real” price of share – the in the name of index split by the consumer price index. Once the war damaged out the new York share Exchange to be closed to protect against panic selling. There space no prices for the brand-new York stock Exchange, although a lively “curb market” did develop. ~ the industry reopened it rose as investors realized that the United claims would profit as a neutral. The sector then began a lengthy slide that started when tensions in between the joined States and also Germany climbed at the end of 1916 and continued ~ the joined States entered the war. A second, less rise started in the spring of 1918 once an ally victory started to it seems to be ~ possible. The rise continued and gathered momentum after the Armistice. In actual terms, however, as presented by the lower line in the figure, the increase in the stock market was not enough to offset the climb in customer prices. At time one hears that war is good for the share market, however the figures for civilization War I, together the numbers for other wars, tell a more facility story.<6>

Figure 2


Table 2 reflects the amounts of several of the crucial munitions developed during the war. During and also after the war movie critics complained that the mobilization was also slow. American troops, for example, often went into fight with French artillery, clearly evidence, the doubters implied, of incompetence what in the supply chain. It does take it time, however, to convert existing factory or build brand-new ones and also to occupational out the details of the production and also distribution process. The last column of Table 2 shows height monthly production, commonly October 1918, at an annual rate. That is apparent that by the finish of the war the United claims was start to attain the “production miracle” that emerged in world War II. When Franklin Roosevelt called for 50,000 plane in world War II, his demand was viewed as an astounding practice in bravado. Yet when we look in ~ the last column of the table we check out that the United claims was hitting this level of production for Liberty engines by the end people War I. There were efforts throughout the war to name: coordinates Allied production. Come some degree this was tried – the unified States produced much the the smokeless powder offered by the Allies – yet it was always clear the the United states wanted its own military equipped through its own munitions.

Table 2Production that Selected supplies in world War I
MunitionTotal ProductionPeak monthly production at an yearly rate
Machine guns226,557420,000
Artillery units3,0774,920
Smokeless powder (pounds)632,504,000n.a.
Toxic Gas (tons)10,81732,712
De Haviland-4 bombers3,22713,200
Liberty plane engines13,57446,200
Source: Ayres (1919, passim)

Financing the War

Where did the money come from to buy every these munitions? climate as now there were, the professionals agreed, three an easy ways come raise the money: (1) raising taxes, (2) borrowing from the public, and also (3) print money. In the Civil battle the government had had simply printed the famous greenbacks. In civilization War ns it was possible to “print money” in a much more roundabout way. The government can sell a bond to the newly created Federal Reserve. The federal Reserve would certainly pay for it by developing a deposit account because that the government, i m sorry the government might then draw upon to salary its expenses. If the government first sold the bond come the general public, the procedure of money production would be even much more roundabout. In the finish the an outcome would be lot the exact same as if the government had simply printed greenbacks: the federal government would be paying because that the war v newly created money. The experts gave tiny consideration come printing money. The reason may be that the gold conventional was sacrosanct. A financial plan that would reason inflation and drive the United claims off the gold standard was no to be taken seriously. Some economic experts may have actually known the history of the greenbacks that the civil War and the inflation they had actually caused.

The real choice appeared to be between raising taxes and also borrowing native the public. Most economic experts of the people War ns era thought that raising taxes to be best. Here they were complying with a heritage that stretched ago to Adam blacksmith who suggested that that was important to raise counting in bespeak to connect the true price of battle to the public. During the battle Oliver Morton Sprague, one of the leading economists of the day, offered one more reason for preventing borrowing. It was unfair, Sprague argued, to breeze men into the armed forces and then expect them come come home and also pay higher taxes to money the interest and also principal on war bonds. Most males of affairs, however, assumed that part balance would have to be struck between taxes and borrowing. Treasury Secretary william Gibbs McAdoo believed that financing about 50 percent indigenous taxes and also 50 percent from bonds would be around right. Financing an ext from taxes, specifically progressive taxes, would frighten the wealthier classes and undermine their assistance for the war.

In October 1917 congress responded to the contact for higher taxes v the battle Revenue Act. This act boosted the personal and corporate income tax rates and established brand-new excise, excess-profit, and luxury taxes. The tax rate for an income of $10,000 with 4 exemptions (about $140,000 in 2003 dollars) went from 1.2 percent in 1916 to 7.8 percent. Because that incomes the $1,000,000 the rate went from 10.3 percent in 1916 come 70.3 percent in 1918. These increase in taxes and also the increase in nominal earnings raised profits from $930 million in 1916 come $4,388 million in 1918. Commonwealth expenditures, however, boosted from $1,333 million in 1916 come $15,585 million in 1918. A substantial gap had opened up that would have to be close up door by borrowing.

Short-term borrowing was undertaken together a stopgap. To mitigate the press on the Treasury and also the danger of a surging in temporary rates, however, the was crucial to worry long-term bonds, for this reason the Treasury developed the famous Liberty Bonds. The very first issue to be a thirty-year link bearing a 3.5% coupon callable after ~ fifteen years. Over there were 3 subsequent problems of Liberty Bonds, and one that shorter-term victory Bonds after ~ the Armistice. In all, the revenue of these bonds raised over $20 billion dollars because that the battle effort.

In bespeak to strengthen the market for Liberty Bonds, Secretary McAdoo released a collection of nationwide campaigns. Huge rallies were held in which famed actors, such as Charlie Chaplin, urged the crowds to buy Liberty Bonds. The government additionally enlisted famed artists to attract posters urging people to purchase the bonds. One of these posters, which room widely search by collectors, is shown below.


Louis Raemaekers. After ~ a Zeppelin Raid in London: “But Mother had actually Done nothing Wrong, had actually She, Daddy?” stop this in new York: Invest in Liberty Bonds. 19″ x 12.” native the Rutgers college Library arsenal of Liberty bond Posters.

Although the campaigns may have actually improved the moral of both the equipped forces and the human being at home, just how much the campaigns contributed to broadening the industry for the bonds is an open question. The bonds to be tax-exempt – the exact degree of exemption differed from issue to problem – and this without doubt made lock attractive to investors in high tax brackets. Indeed, the Treasury was criticized because that imposing high marginal taxes with one hand, and then producing a loophole through the other. The commonwealth Reserve also bought many of the bond creating brand-new money. Some of this brand-new “highpowered money” augmented the reserves of the commercial banks which allowed them come buy bond or come finance their acquisition by personal citizens. Thus, straight or indirectly, a an excellent deal of the support for the bond market was the result of money development rather 보다 savings by the basic public.

Table 3 gives a rough failure of the method used to finance the war. The the total cost of the war, around 22 percent was financed by taxes and also from 20 to 25 percent by print money, which supposed that native 53 to 58 percent to be financed v the shortcut issues.

Table 3Financing civilization War I, march 1917-May 1919Source of financeBillions that DollarsPercent (M2)Percent (M4)
Taxation and nontax receipts7.32222
Borrowing native the public245853
Direct money creation1.655
Indirect money creation (M2)4.815
Indirect money production (M4)6.620
Total cost of the war32.9100100
Note: direct money creation is the increase in the share of high-powered money net of the rise in monetary gold. Indirect money creation is the boost in financial liabilities not matched through the boost in high-powered money.

Source: Friedman and also Schwartz (1963, 221)

Heavy dependence on the commonwealth Reserve meant, of course, the the share of money raised rapidly. As presented in Table 1, the share of money rose from $20.7 billion in 1916 to $35.1 exchange rate in 1920, about 70 percent. The price level (GDP deflator) boosted 85 percent over the same period.

The Government’s role in Mobilization

Once the contracts because that munitions to be issued and also the money started flowing, the government could have relied ~ above the price mechanism to point out resources. This to be the policy followed throughout the polite War. For a number of reasons, however, the government attempted to manage the assignment of sources from Washington. Because that one thing, the Wilson administration, showing the steady wing that the democratic Party, was suspicious of the market, and also doubted its capability to work-related quickly and efficiently, and to protect the median person versus profiteering. An additional factor was merely that the european belligerents had embraced wide-ranging financial controls and also it made sense for the unified States, a latecomer, to follow suit.

A wide selection of organ were produced to control the economy throughout the mobilization. A look at at four of the most necessary – (1) the Food Administration, (2) the Fuel Administration, (3) the rail Administration, and also (4) the War sectors Board – will imply the extent to i beg your pardon the United claims turned far from its timeless reliance ~ above the market. Unfortunately, an are precludes a evaluation of numerous of the various other agencies such as the war Shipping Board, which developed noncombatant ships, the battle Labor Board, i m sorry attempted to work out labor disputes, and also the new Issues Committee, which vetted private problems of stocks and bonds.

Food Administration

The Food administration was produced by the bar Food and also Fuel action in august 1917. Herbert Hoover, that had already won global fame together a relief administrator in China and Europe, was appointed come head it. The mission the the Food administration was to stimulate the production of food and also assure a fair distribution among American civilians, the equipped forces, and the Allies, and also at a same price. The Food management did not attempt to collection maximum prices at retail or (with the exception of sugar) to ration food. The action itself collection what then was a high minimum price for wheat – the crucial grain in international sectors – in ~ the farm gate, back the price would eventually go higher. The markups that processors and also distributors were controlled by licensing them and threatening come take their licenses away if lock did no cooperate. The Food management then attempted control prices and quantities in ~ retail through calls for voluntary cooperation. Millers were motivated to tie the sale of wheat flour come the sale of less preferable flours – corn meal, potato flour, and so top top – therefore making a virtue the end of a practice that would have been related to as a disreputable evasion of formal price ceilings. Bakers were motivated to bake “Victory bread,” which consisted of a wheat-flour substitute. Finally, Hoover urged americans to curtail their consumption of the most beneficial foodstuffs: over there were, for example, Meatless Mondays and Wheatless Wednesdays.

Fuel Administration

The Fuel administration was created under the very same Act as the Food Administration. Bother Garfield, the kid of chairman James Garfield, and the chairman of Williams College, to be appointed come head it. Its main trouble was regulating the price and distribution of bituminous coal. In the winter that 1918 a variety of factors an unified to cause a serious coal shortage that required school and also factory closures. The Fuel Administration set the price of coal at the mines and the margins of dealers, mediated conflicts in the coalfields, and also worked with the Railroad management (described below) come reduce long hauls of coal.

Railroad Administration

The Wilson administration nationalized the railroads and put lock under the manage of the Railroad administration in December that 1917, in an answer to serious congestion in the railway network that was holding up the motion of war goods and also coal. Wilson’s energetic Secretary the the Treasury (and son-in-law), william Gibbs McAdoo, was appointed come head it. The railroads would remain under government manage for an additional 26 months. There has actually been substantial controversy over how well the system operated under federal control. Defenders that the takeover point out that the congestion to be relieved and also that policies that raised standardization and also eliminated unnecessary vain were put in place. Movie critics of the takeover suggest to the big deficit the was incurred, virtually $1.7 billion, and to the destruction of the capital stock of the industry. William J. Cunningham’s (1921) two papers in the Quarterly journal of Economics, although written soon after the event, still provide one the the most detailed and also fair-minded treatments of the rail Administration.

War markets Board

The most important federal agency, at the very least in terms of the border of its mission, to be the War sectors Board. The plank was created in July of 1917. Its purpose was no less than to assure the full mobilization that the nation’s resources for the function of win the war. Originally the plank relied ~ above persuasion to do its assignment effective, however rising criticism that the pace of mobilization, and also the troubles with coal and transport in the winter of 1918, caused a increase of its role. In march 1918 the board was reorganized, and also Wilson put Bernard Baruch, a wall Street investor, in charge. Baruch mounted a “priorities system” to identify the bespeak in i beg your pardon contracts can be to fill by manufacturers. Contract rated AA by the War sectors Board had to it is in filled before contracts rated A, and so on. Although much hailed at the time, this system proved poor when tried in world War II. The War sectors Board also set prices that industrial products such together iron and steel, coke, rubber, and so on. This was taken on by the Board’s elevation Price resolving Committee.

It is tempting come look at these experiments for ideas on how the economic situation would perform under various forms of financial control. The is important, however, to store in mind the these were very brief experiments. Once the war finished in November 1918 many of the agencies immediately wound up your activities. Only the Railroad administration and the war Shipping Board ongoing to operate. The War sectors Board, for example, remained in operation only for a full of sixteen months; boy name Baruch’s tenure was just eight months. Obviously only restricted conclusions have the right to be drawn from this experiments.

Costs the the War

The human and economic expenses of the battle were substantial. The fatality rate was high: 48,909 members that the equipped forces passed away in battle, and also 63,523 died from disease. Numerous of those who died from disease, perhaps 40,000, passed away from pneumonia throughout the influenza-pneumonia epidemic the hit in ~ the finish of the war. Some 230,074 members the the equipped forces suffered nonmortal wounds.

John Maurice Clark detailed what is still the most detailed and also thoughtful calculation of the price of the war; a total amount of about $32 billion. Clark do the efforts to calculation what an economist would contact the source cost that the war. Because that that factor he had actual federal federal government spending on the Army and also Navy, the amount of international obligations, and the difference in between what federal government employees can earn in the personal sector and also what they actually earned. The excluded interest on the nationwide debt and part of the subsidies paid to the Railroad management because he thought they to be transfers. His calculation of $32 exchange rate amounted to about 46 percent that GNP in 1918.

Long-run economic Consequences

The battle left a number of economic legacies. Right here we will certainly briefly explain three the the most important.

The finances of the federal federal government were permanently altered by the war. It is true that the tax rises put in place during the battle were scaled earlier during the 1920s by successive Republican administrations. Tax rates, however, had actually to remain higher than prior to the battle to salary for greater expenditures due mainly to interest on the national debt and veterans benefits.

The international financial position the the United states was permanently changed by the war. The united States had actually long to be a debtor country. The united States emerged from the war, however, together a net creditor. The turnaround was dramatic. In 1914 U.S investments overseas amounted to $5.0 billion, while complete foreign invest in the United claims amounted come $7.2 billion. American were net debtors to the tune of $2.2 billion. By 1919 U.S invest abroad had actually risen to $9.7 billion, while total foreign invest in the united States had fallen to $3.3 billion: americans were net creditors come the track of $6.4 billion.<7> prior to the war the center of the world resources market to be London, and also the bank of England to be the world’s most crucial financial institution; after the war leadership shifted to new York, and the role of the commonwealth Reserve to be enhanced.

The administration of the war economic climate by a phalanx of federal agencies encouraged many Americans the the government might play vital positive duty in the economy. This lesson remained dormant during the 1920s, yet came come life as soon as the unified States faced the an excellent Depression. Both the general idea that fighting the Depression by producing federal agencies and many the the particular agencies and also programs reflect precedents set in Word battle I. The Civilian conservation Corps, a Depression era firm that rental young guys to work on conservation projects, because that example, check to attain the benefits of army training in a civilian setting. The National commercial Recovery plot reflected concepts Bernard Baruch occurred at the War sectors Board, and also the agricultural Adjustment management hearkened ago to the Food Administration. Ideas about the appropriate duty of the federal government in the economy, in various other words, may have actually been the most important financial legacy that American joining in world War I.

Chronology of people War I19141915191619171918
JuneArchduke Franz Ferdinand is shot.
AugustBeginning of the war.
MaySinking of the Lusitania. Battle talk starts in the unified States.
JuneNational Defense Act increases the Army
FebruaryGermany renews unrestricted submarine warfare.U.S.S. Housatonic sunk.U.S. Division diplomatic connections with Germany
AprilU.S. Declares war.
MaySelective organization Act
JuneFirst Liberty Loan
JulyWar markets Board
AugustLever Food and also Fuel manage Act
OctoberWar Revenue Act
NovemberSecond Liberty Loan
DecemberRailroads space nationalized.
JanuaryMaximum prices because that steel
MarchBernard Baruch top the War sectors BoardGermans start massive attack on the western front
MayThird Liberty LoanFirst independent activity by the American Expeditionary Force
JuneBattle the Belleau hardwood – the first sizable U.S. Action
JulySecond fight of the Marne – German attack stopped
September900,000 american in the fight of Meuse-Argonne
OctoberFourth Liberty Loan

References and Suggestions for further Reading

Ayres, Leonard P. The War v Germany: A statistical Summary. Washington DC: federal government Printing Office. 1919.

Balke, Nathan S. And also Robert J. Gordon. “The estimate of Prewar Gross nationwide Product: Methodology and new Evidence.” Journal of politics Economy 97, no. 1 (1989): 38-92.

Clark, john Maurice. “The basis of War-Time Collectivism.” American economic Review 7 (1917): 772-790.

Clark, man Maurice. The expense of the people War to the American People. new Haven: Yale University press for the Carnegie sweetheart for worldwide Peace, 1931.

Cuff, Robert D. The War industries Board: Business-Government connections during people War I. Baltimore: Johns Hopkins university Press, 1973.

Cunningham, william J. “The Railroads under government Operation. I: The duration to the near of 1918.” Quarterly journal of Economics 35, no. 2 (1921): 288-340. “II: native January 1, 1919, to March 1, 1920.” Quarterly newspaper of Economics 36, no. 1. (1921): 30-71.

Friedman, Milton, and also Anna J. Schwartz. A Monetary history of the joined States, 1867-1960. Princeton: Princeton university Press, 1963.

Friedman, Milton, and Anna J. Schwartz. Monetary Statistics of the unified States: Estimates, Sources, and also Methods. Brand-new York: Columbia university Press, 1970.

Gilbert, Martin. The an initial World War: A complete History. New York: Henry Holt, 1994.

Kendrick, man W. Productivity patterns in the united States. Princeton: Princeton university Press, 1961.

Koistinen, Paul A. C. Mobilizing for contemporary War: The Political economic situation of American Warfare, 1865-1919. Lawrence, KS: University push of Kansas, 1997.

Miron, Jeffrey A. And also Christina D. Romer. “A brand-new Monthly table of contents of commercial Production, 1884-1940.” Journal of financial History 50, no. 2 (1990): 321-37.

Rockoff, Hugh. Drastic Measures: A background of Wage and also Price Controls in the united States. Brand-new York: Cambridge university Press, 1984.

Rockoff, Hugh. “Until It’s Over, over There: The U.S. Economic climate in world War I.” national Bureau of economic Research, Working paper w10580, 2004.

U.S. Office of the Census. Historical Statistics that the joined States, early american Times come 1970, Bicentennial Edition. Washington, DC: federal government Printing Office, 1975.


<1> Quoted in Gilbert (1994, 3).

<2> U.S. Exports to Europe space from U.S. Office of the Census (1975), collection U324.

<3> genuine wages in manufacturing were computed by separating “Hourly revenue in manufacturing Industries” by the consumer Price index (U.S. Office of the Census 1975, collection D766 and E135).

<4> stole ingots space from the national Bureau of financial Research, macrohistory database, series m01135a, Complete Industrial manufacturing is indigenous Miron and also Romer (1990), Table 2.

<5> The sharp and also temporary autumn in the winter the 1918 was due to a shortage the coal.

<6> The chart mirrors end-of-month worths of the S&P/Cowles Composite share Index, from an international Financial Data: To obtain real prices I split this table of contents by monthly values of the unified States customer Price table of contents for every items. This is easily accessible as collection 04128 in the nationwide Bureau of economic Research Macro-Data Base accessible at

See more: Rock Is Formed When Debris Is Buried, Compressed And Cemented Together.

<7> U.S. Investments abroad (U.S. Office of the Census 1975, series U26); international investments in the U.S. (U.S.