Against the Current, No. 185, November/December 2016
On Imperial Conundrums
— The Editors
Institutional Racism & the Thirteenth Amendment
— Malik Miah
The Enormous Profit of Thirst
— Josiah Rector
Environmental Racism in Santa Cruz
— Michael Gasser
AIDS: The Struggle Continues
— Sam Friedman
Indiana: The Culpability of Politicians
— Sam Friedman
Fighting for "Schools We Deserve"
— Robert Bartlett
Budgeting Disaster and Charters
— Robert Bartlett
Review: Whose Education? Whose Control?
— Marian Swerdlow
Bolivia's Extractive Economy and Alternatives
— Marc Becker
Venezuela: What's Going On?
— an interview with Jeffery Webber
How Woodrow Wilson Entered World War I
— Allen Ruff
Oil Pipelines: Converging in Illinois
— Sandra Lindberg
The Wikileaks Files
— Cliff Conner
A Nation Behind Bars
— Keith Mann
Weaponizing Modernist Culture
— Alan Wald
The Paradox of Che Guevara
— Peter Solenberger
South Africa: The Radical Thought of Rick Turner
— Alex Lichtenstein
An Anti-Apartheid Class Revisited
— Billy Keniston
Response: Does Being a Revolutionary Mean Being a Terrorist?
— Rebecca Hill
WORLD WAR I had already been raging across Europe and elsewhere for two and a half years when Woodrow Wilson went before a joint session of Congress on April 2nd, 1917 to request a declaration of war against Germany.
The President began his address with a casus belli indictment against the “Kaisereich” centered primarily upon the continued violation of U.S. neutrality that Wilson had declared at the very start of the war in August, 1914. Overriding limited but vocal opposition, the Senate and House quickly complied with his request and the United States formally entered the “Great War” on April 6th.
Despite heightened interventionist sentiment by that spring of 1917, there was diverse and widespread resistance against U.S. direct involvement. Wilson had been inaugurated to a second term less than a month before, having barely defeated his Republican opponent the previous November in part by campaigning on the slogan “He Kept Us Out of War.”
So why did the United States enter? The dominant narrative regarding the decision has long focused on the violations of that proclaimed American neutrality, and regularly describes the country as the “reluctant belligerent” finally drawn into the conflict due to Germany’s unrestricted submarine warfare — the February 1st resumption of previously-suspended U-Boat torpedoing of Entente-bound shipping. The Triple Entente — Russia, France and England — faced off against the Central Powers — Austria-Hungary, Germany and the Ottoman Empire.
The prevailing claim has held that some deep-seated “isolationist impulse” and an animus toward Old World “foreign entanglements” had predominated until then, but finally gave way due to the resumed German attacks on the rights of “free passage” on the high seas.
A closer examination reveals, however, that the United States had become a significant party, far from neutral in the war against the Central Powers, long before that spring.
In reality, Wilson’s 1914 call for neutrality “in thought, as well as action… as well as upon every transaction” had rapidly gone by the boards as American industry and agriculture, facilitated by the giants of finance capital, rapidly became the prime providers of hundreds of millions, then billions of dollars of war-related materiel of every sort for the Allies.
By early 1915, Entente demand lifted the U.S. economy out of a severe recession, the second in less than a decade, which had begun in 1913 and deepened during the early months of the war. That cross-Atlantic trade not only stimulated a stateside economic boom but in so doing, tethered U.S. economic wellbeing to the fortunes of the Anglo-French led coalition.
All that, in tandem with nationalist imperial ambitions and broader Anglophile historic and cultural ties, especially among dominant elites along the Eastern Seaboard, made U.S. involvement all but inevitable.
War and Empire
The immediate events of early 1917 must be viewed in a broader, layered context. First off, the United States was never truly “isolationist,” in that it had long been a fully integral part of the British-dominated Atlantic economy. Despite periods of antagonism and open conflict dating back to the Revolution, the War of 1812 and the Civil War, overseas trade — especially that of slave-grown cotton in exchange for British capital goods, technologies, and investment — had enabled the country’s first industrial revolution and “takeoff.”
Facilitated by well-established institutional ties between the City of London and Wall Street, trans-oceanic circuits of credit and investment continued to evolve and deepen. While Britain’s position as the “workshop of the world” gave way to U.S. productive might and an ascendant Germany before 1900, the City of London with its financial and commercial services still functioned as the “switchboard” (Marxist global historian Eric Hobsbawm’s term) for the world’s business transactions.
All that would begin to change dramatically with the “Great War” as the UK went deeply into hock to its major provider and those already entangled cross-Atlantic conduits of finance and trade were rewired.
The United States’ non- and then belligerent involvement in the war must be viewed in the context of the country’s rise as an economic powerhouse of industrial and agricultural productivity, a competing center of world capitalist development, and an ascendant global power during the preceding half century — a period of increasing nationalist ambition and inter-imperialist rivalry spurred by crisis-ridden capitalist expansion that Hobsbawm called the “Age of Empire.”
Overall U.S. industrial productivity skyrocketed in that last third of the 19th century. For example, by 1896 this country became the world’s leading producer of steel as its manufacturers, increasingly concentrated and employing ever greater economies of scale, actually came to undersell British steel in the UK despite shipping costs.
Production of cotton, the leading U.S. export, doubled from the early 1880s to 1900 while wheat increased by a third. By 1900, nearly 20% of the country’s total agricultural production including two-thirds of its cotton and nearly 40% of its wheat went abroad, primarily to Great Britain.
By then, the country was also exporting half of its domestic production of oil and copper while competitors in the UK and France were raising concerns about an “American invasion” of a vast array of mass-produced consumer goods.
Concurrently major industrial firms and banking houses, flush with capital and never constrained by national boundaries, turned their sights to international markets, opportunities for direct foreign investment, and the development of U.S.-owned companies in Europe, Latin America, the Asian Pacific and elsewhere. Such ventures increasingly turned to diplomatic assistance and direct interventionist protection when needed, as business interests abroad increasingly became capitalist state “national interests.”
Never truly isolationist, the United States embarked on its own imperialist course in its 1898 war with Spain by snatching Cuba and Puerto Rico in the Caribbean and the Philippines and Guam in the Pacific — which along with Hawaii, formally annexed the same year, had long been coveted as strategic way stations to a long-pursued “China market” on the Asian mainland.
Subsequently, presidents from McKinley through Wilson repeatedly sent troops and occupation forces to combat anti-colonial insurgencies, impose “order” and “civilization” and safeguard U.S.-owned property and investments in Mexico, Haiti, Nicaragua, the Dominican Republic, Cuba, Puerto Rico, Honduras, Panama, the Philippines and China, all prior to 1917.
Importantly, that overseas expansion was never pushed merely by economic imperatives, but was ideologically propelled by an evolving complex of secular and religious belief in the exemplary character of the American “experiment;” its “manifest destiny” to reform the world.
Resting upon late 19th century racialist assumptions of White Anglo-Saxon Protestant superiority, and seemingly preordained and verified by material success and Social Darwinist “survival of the fittest” claims, that “civilizational” mission — ultimately but one nationalist ideology among many — informed the imperial project. It oozed from the speeches, writings and visions of the country’s intellectual and political elites perhaps best epitomized by Woodrow Wilson.
During the 1914 “July Crisis” preceding the start of the Great War, as diplomatic solutions dimmed and various opposing armies mobilized, jittery European investors began to unload their securities in exchange for the safety of gold. But the governments of Germany, Austria, France and Britain halted the conversion to the “universal medium of exchange.”
Those holding American securities, still redeemable in gold, then looked to cash in. That threatened gold drain, in tandem with the potential selling off of billions of dollars of American securities held abroad, further unsettled the Euro-Atlantic economy.
With war imminent, every major European exchange shut down. The last to close, the London Stock Exchange did so on July 31st and the New York Stock Exchange followed suit within hours, not to reopen until late November. The result was a deepening of the recession already underway since the previous fall as employers, caught in the banking and credit crisis, laid off workers.
With many factories operating at 60% capacity, and with the number of unemployed doubled from the year before, observers began comparing conditions in some cities, worsened by a dramatic increase in food prices, to those during the explosive depression winter of 1893-1894.
But the recession began to lift as the new year got underway, primarily due to the promise and then the flow of Entente war orders. Already, during the first month of the war, both Britain and France sent agents to the United States to purchase materiel for their respective armies.
Within the year, other Allies — among them Russia, Italy, Belgium, Serbia and Greece — sent representatives to procure U.S. goods. In October, the British ordered some 400,000 rifles from American manufacturers just as the Royal Navy was busily driving German merchant ships from the Atlantic.
Bankers, Guns and Money
Following several hectic months in which the various Allies separately competed for U.S.-made materiel, in January 1915 the British government signed a “Commercial Agency Agreement” with the Wall Street giant of finance capital, J.P. Morgan & Company. The compact designated the company as the official purchasing agent, at a 1% commission, of U.S.-produced war goods. It gave Morgan a dominant role in financing the Allied war effort and made Britain the Entente’s prime paymaster.
To manage what soon became a torrent of British purchases, Morgan created a dedicated Export Department staffed by 175 handpicked specialists which, at its height, handled 4,000 prime contracts for purchasing, insuring and shipping as much as $10 million in goods per day — everything from canned beef to locomotives, wheat, copper, chemicals, cotton, explosives, machine tools and especially, weapons and ammunition.
As a result, between January 1915 and April ’17, Morgan became the world’s largest single purchaser of goods as it procured more than $3 billion (in 1913 dollars) in war-related materials for the Allies, with 60% of that total going toward arms and munitions.
The Export Department not only coordinated contracts, credit arrangements and payments. It organized subcontractors and facilitated cooperation between on-site Allied ordnance experts and American munitions and arms makers.
By April 1917, Britain had opened numerous purchasing missions with some 10,000 operatives in the United States. British agents actually supervised the construction and retooling of American factories and traveled with shipments of materiel to East Coast ports to oversee security. In 1916, when the Brits experienced delays in the shipments of rifles and ammo from Connecticut manufacturers, Morgan intermediaries even helped engineer a deal that allowed British supervisors to assume de facto operation of some arms plants.
At the beginning of the First Battle of the Somme in late June 1916, British guns bombarded the German positions for 10 days with some 1.5 million shells. By that time, U.S. firms were supplying the British Army with three quarters of its light artillery rounds. By the spring of 1917, U.S. plants were producing 15,000 British and Russian rifles daily and were producing machine guns, artillery shells, small arms cartridges and gunpowder on a staggering scale.
At the start of the war, the Wilson administration had blocked the U.S. sale of war bonds by belligerents as a violation of “neutrality,” but through 1915 Morgan and other houses succeeded in persuading the Executive that public subscription loans, loans to the general investing public, did not violate the spirit of American neutrality. (At the beginning of the year, Wilson reportedly gave J.P. Morgan Jr. approval for any action “in furtherance of trade.”)
That September, after meeting with an Anglo-French financial delegation, Morgan representatives forged a syndicate of some 2200 banks that extended a $500 million loan to France and Britain, at that point the largest single loan in financial history, supported by a five-year, five percent bond issue. By the spring of 1917, the British had borrowed some $2.7 billion in such manner.
Initially, the British liquidated overseas investment and sent gold to the United States to pay for its war orders. But after the beginning of German submarine attacks on their merchantmen, shipments of bullion declined. In its place, Morgan and other houses extended commercial credit to the Allies; Morgan, by 1917 was carrying a half billion dollars in unsecured British “short term” debt.
The trade in war-related materiel proved extremely profitable for manufacturers. (For example, iron and steel exports quintupled from 1914 to 1917, with average rates of profit going from 7.4% to 28.7% between 1915 and1917.)
Allied demand also opened up tens of thousands of relatively high wage industrial jobs, primarily in the North, just as the war disrupted the cross-Atlantic flow of European immigrant labor. By doing so, it helped stimulate the first “Great Migration” of African-Americans from the South. [See http://www.solidarity-us.org/node/4331]
The “war boom” and its connection to continuing prosperity was not lost on those in power. Wilson and his advisors certainly understood how war trade boosted the economy. They also understood how expansion of American finance at the expense of the Brits created the potentialities for a post-war “new world order.”
What informed that vision was the fact that the country, prior to its formal entry in the war, had gone from being a debtor to a creditor nation for the first time.
The Pivotal Year: 1916
Mainstream historians have argued that economic interest in support of the Allied effort was not the driving force, or even a significant factor that led to U.S. entry into the war.
Germany’s military command, however, understood from early on what U.S. material and financial assistance to the Entente meant. Reluctant to draw the country into the war on the Allied side, it tread carefully, going even so far as to curtail or greatly scale back submarine attacks on Allied shipping, especially after the sinking of the British liner Lusitania in May, 1915.
But through 1916, that command faced a series of mounting crises created by the ever more costly toll of “total war” waged by an enemy increasingly well-provisioned by the still “neutral” United States.
At the beginning of the war, Britain inaugurated a long-planned naval blockade of Germany, in part to confine the Imperial Navy to port, but also to stop merchant carriers, including neutrals like the United States at the time, from providing the Reich with essential war materiel.
In early November, 1914 Britain declared the entire North Sea a “military area,” possibly mined, as a warning to merchant shipping and soon included food stuffs on its list of “contraband” war goods. (At that point, the Wilson administration officially protested the British disruption of the American carrying trade.)
In response, with only nine U-Boats in total to start, the German command inaugurated its first round of submarine attacks in an attempt to drive British merchantmen into port.
By the beginning of 1916, the British naval siege, what had become a “starvation blockade,” played a major impact in deepening a German home front crisis. As ever-diminishing food rations, precipitous declines in daily intakes, and scarcities of basics worsened by black market profiteers battered day-to-day popular class existence, food riots spread across German cities, including Berlin, crucial to war production.
That deteriorating home front situation paralleled Western Front stalemate battles of Verdun, from February to December, and the Somme, July-October. Incredibly costly in material terms and exacting millions of casualties, that year’s carnage deepened German desperation.
So too did the naval Battle of Jutland at the end of May, in which the German fleet failed to break the blockade’s strangle hold and gain access to the Atlantic — a setback that informed the subsequent January, 1917 decision to gamble on the resumption of submarine warfare.
From “Preparedness” to War
U.S. developments informed the German decision, as well. From early in the war, an elite cohort of pro-Allied political figures such as Theodore Roosevelt, prominent business leaders and military figures headed a well-orchestrated and financed “preparedness campaign” to move the country toward direct involvement.
Sold to the public as a matter of “defense” and “deterrence,” that pro-war movement achieved a major victory with the June, 1916 passage of the National Defense Act which included an expansion of the Army and the National Guard and the creation of a Reserve Officers’ Training Corps.
The act expanded the presidential authority to federalize the National Guard and changed the duration and circumstances under which it could be called up. It funded the creation of an Army aviation wing with the allocation of over $17 million for 375 new airplanes, while the government took steps to ensure the immediate availability of war equipment by contracting in advance for the production of gunpowder and other materiel.
Subsequently, the Naval Act of August 1916, promoted by “big navy” globalists, provided for the construction of ten battleships, sixteen cruisers, fifty destroyers, seventy-two submarines and fourteen auxiliaries.
By January 1917, an important part of the German military command’s strategic and tactical calculations came to rest on the assumption that it would be but a matter of time before the United States would formally enter the war. Imperial Navy strategists convinced the military high command and the Kaiser that a resumption of unrestricted submarine warfare could help defeat Great Britain within five months.
Countering the concern that resumption of U-Boat attacks would draw the United States into the war, they argued that Washington actually was not neutral and had waived its neutrality by acquiescing to the Allied “starvation blockade.”
German submarine attacks resumed on February 1st and the United States broke diplomatic relations on February 3rd. The U.S. war boom was at its peak, but as a now-enlarged U-Boat fleet started taking a heavy toll on Allied shipping, the cancellation of Atlantic crossings began and goods started piling up in Eastern ports. That led to concerns over increased plant closings, an end to the war prosperity, and an ever-looming specter of social unrest.
On February 26 Wilson asked Congress to authorize the arming of merchantmen, in the name of “armed neutrality.” But antiwar Senators, correctly arguing that the placement of deck guns and naval personnel on civilian ships constituted an act of war, filibustered the measure. Wilson then proceeded to arm the ships by executive order. By then, “neutrality” existed in name only and after the sinking of several U.S.-flagged merchantmen in March, Wilson went before Congress on April 2nd for a war declaration.
Several other developments had played a role in moving the United States toward open belligerency, or made it easier for Wilson to win Congressional and broader public support. One was the coming of the Russian Revolution weeks earlier, as the abdication of the Czar on March 15th (February 27th) allowed Wilson to rhetorically redefine the conflict as one between “democracy” and “autocracy.”
The second involved public disclosure of the “Zimmerman Note,” a secret communiqué from the German Foreign Minister instructing the German Ambassador to Mexico to convey an offer to Mexico’s President Carranza: that upon U.S. entry in the war, Berlin would assist Mexico in recovering Texas, New Mexico and Arizona.
British intelligence had intercepted and decoded the cable in mid-January, but did not immediately share it with U.S. officials. But with the February resumption of submarine warfare taking its toll, the British finally forwarded the intercept to Wilson on February 24 in the hope that it would move the country toward formal entry. The American press carried the story the following week and stoked the increasing pro-war clamor.
War and Myth
Narrow claims that the United States was reluctantly drawn into the World War solely due to German violations of its neutrality do not stand up under close scrutiny.
There certainly was widespread popular antiwar opposition coming from numerous quarters from pacifists, socialists, progressives, recent immigrants and workers. But that opposition was never simply based on some deeply ingrained “isolationist impulse.” It reflected a nation deeply divided along economic and social fault lines of class, race, ethnicity and gender.
For example, a third of the population in 1910 was foreign born or first generation American-born. Millions of them were of German or Austro-Hungarian descent and remained far from enthusiastic in their support for a war against their respective “homelands.” Additional millions were of Irish ancestry, reluctant to side with the British, especially after the repression of the 1916 Easter Rising.
Besides, there were additional millions of people, already aware of the war’s devastation and carnage, who would soon become the victims of intolerance, coercion, and conscription to make “the world… safe for democracy.”
World War I was an imperialist war. The United States became involved not as some “reluctant belligerent,” a nation wronged and its sovereignty violated, but as an aspiring, ascendant imperial power. The war destabilized an old global order and opened new opportunities, short term and long.
Beyond the rhetorical and ideological trappings, the understanding of what involvement could accomplish for U.S. standing in the world was not lost on those sitting at the “commanding heights” of the economy or the state, well before a single U.S. soldier died in the trenches of the Western Front.
November-December 2016, ATC 185