During the First World War, what was the conflict between political rhetoric and economic necessity faced by Woodrow Wilson? What were the struggles facing capitalism at the time? More importantly, how was the American Dream impacted if at all by the results of World War I and the emergence of the US as a global player? Is there a specific question out of the 4 questions we seek to answer about the American Dream that was most affected in your opinion as a result?
Initially, the United States was not apart of World War I 1914-1919. In fact President Wilson was advocating peace and called for an end to the war. However, President Woodrow Wilson on April 2, 1917 went before a joint session of Congress to request a Declaration of war against Germany. Wilson had used as his reason for declaring war against Germany their use of unrestricted submarine warfare and an attempt to convince Mexico in forming an alliance to attack against the US. On April 6 the United States declared war on Germany. Before war was declared on Germany the United States had warn them that if they do not refrain from attacking passenger ships they would sever diplomatic relationship with them. Germany agreed to this and what was known as Sussex Pledge was formed. The United States faced a major economic lost in their participation in the war. Approximately 52 percent of the United States gross national product was spent in the financing of the war. Before the U.S had entered the war their economy had sky rocketed because European powers were purchasing U.S goods for the war. When the U.S joined the war massive federal spending were done to finance the war. Military personnel were expanded as well as Government personnel. Therefore there was a huge reduction in unemployment rate. Fifty eight percent of the money that was used to finance the war came from public borrowing.
Therefore there was a huge tax increase. Pressure was placed on the population to buy bonds and the Government tried to centralize the activities within the country as they saw this as the best way to achieve stability in time of crisis. The stock market was closed to prevent fear selling. During this time Capitalism was challenged. This was because Americans reacted strongly against Wilson’s wartime leadership. The postwar results were labor strikes, rapid inflation, economic recession and racism as Wilson himself had a negative attitude towards black people. Therefore pressure was placed on the State to play a greater role in the society and economy as there was little private investors.
The American dream was impacted in both a positive and a negative way. It impacted it negatively as many of the war heroes were black and they received increase skepticism on their return. They still did not get equality. Many lives were lost and many of the soldiers that return were unemployed.
Unemployment rate had once again risen. However, it was impacted positively because of the fall of other European great powers the State of New York emerged as the leading financial center in the world shifting it from London.