Explain America's industrial growth during the World War I era.

America’s industrial growth during the World War I era was largely due to the huge increase in demand for army supplies. Large contracts from the Army and Navy kept factories busy producing food, clothing, guns, and ammunition.

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At the outset of World War I the United States was in a recession, but the war initiated a 44-month period of industrial and economic growth. The upturn for the US economy came long before the United States entered the war. For two and a half years before war was...

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At the outset of World War I the United States was in a recession, but the war initiated a 44-month period of industrial and economic growth. The upturn for the US economy came long before the United States entered the war. For two and a half years before war was declared, the United States supplied resources for Allied Powers such as France, Great Britain, and Russia. This caused industry to boom as the country exported planes, automobiles, machinery, and other manufactured goods. In 1913, the total value of US exports was only $2.4 billion, but by 1917 the total value had risen to $6.2 billion.

When the United States entered World War I on April 4, 1917, industry grew even more rapidly. There was a need for the manufacturing of massive amounts of rifles, gunpowder, artillery rounds, explosives, and engines for military vehicles and planes, as well as clothing and other needs of the troops. As the manufacturing sector grew, unemployment dropped drastically. Because so many men were deployed overseas and immigration was curtailed due to travel restrictions, more and more women entered the workforce to compensate. Additionally, the need for labor in industries caused hundreds of thousands of African Americans to migrate from the South to Northern industrial centers; this became known as the Great Migration.

After the war the US economic boom did not last as industries ramped down production. A recession in 1918 and 1919 was followed by another in 1920 and 1921. However, the overall effect of World War I on the US economy was positive. Before the war, the United States was a debtor nation, but after the war, the country became a global creditor that was able to invest in other nations, especially in Latin America.

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Although the United States was only directly involved in World War I for the last nineteen months of its duration, the country as a whole benefitted economically from the conflict. As the war did not take place anywhere near American soil, the United States was in a privileged position in relation to its eventual European allies, as the country was protected from damage to its industry. In fact, American industry thrived during the war in response to a massive increase in demand for war-related goods. As well as arms and ammunition, the Army and Navy required food and clothing, and this steady demand led to exponential growth in domestic industrial production.

But even before the United States entered the war in 1917, the American economy benefitted from the conflict that was tearing Europe apart. Industrial output increased rapidly to meet the growing demand for steel, copper, and petroleum among countries such as Great Britain and France. Many European countries saw their domestic economies seriously disrupted, and so there was a large gap in demand that could only be filled by American production. Once the United States finally entered the war, the demand for such materials only increased further, thus driving output even higher.

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American industrial capacity grew a great deal during the World War I era, so much so that it ended a recession that happened early during the Wilson administration. The United States exported goods to help Britain and France in their war against Germany. While Germany also had access to this assistance, it did not have the financial backing from American financiers to underwrite its loans for American war materiel.

Once the United States joined the war in 1917, government became heavily involved in the war industry. Government negotiated directly with labor in order to prevent the industrial strikes that were common before 1914. The federal government also placed orders for raw materials such as coal and metal in order to fuel Allied demand. Going to work in a war industry was considered patriotic. The war curtailed much unionist or otherwise leftist thought in the United States; this was especially true after the Bolshevik Revolution took Russia out of the war.

The abrupt end of the war saw the United States become the world's industrial leader as well as the world's leading creditor. World War I was instrumental in making the United States into a superpower.

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While the U.S. economy was in a recession when World War I broke out in Europe in 1914, the economy quickly rebounded while the U.S. provided war materials to Europeans. The period of American neutrality, which lasted until 1917, allowed the U.S. to convert factories to wartime use so that they were already running when the U.S. later joined the war.

The American government bankrolled a lot of the new production. During the period 1914 to 1918, 3 million people were added to the military payroll, while one million people were added to the government payroll. Unemployment declined from 7.9 percent to 1.4 percent (see the National Bureau of Economic Research statistics at the link below), as people were employed in the military and in defense plants. The government also controlled prices and rates of production through agencies such as the War Industries Board. Much of the industrial growth during World War I was fueled by government spending and controlled through government administration.

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