by G. J. Meyer
House remained in London for three weeks after the assassination of Franz Ferdinand. Finally he had to abandon the hope that, in the midst of an increasingly grave crisis, Grey or someone else was going to give him a concrete proposal that he could take back to Berlin. He took ship for America on July 21, two days before Austria-Hungary delivered its ultimatum to Serbia, one week before Vienna’s declaration of war. Thus he missed being present for the climax of the crisis, which took place as he approached New York, and had no idea that the “awful cataclysm” of which he had written was now only days in the future. He had accomplished nothing of substance, but his journey solidified the attitudes and assumptions that had first become apparent in his talks with Tyrrell in 1913. Germany was uniquely dangerous. “German nobles,” with perhaps one rather obscure exception, lacked a “detached view.” The British, by contrast, shared House’s yearning not just for peace but for the end of militarism. France was not of the first importance and could be dealt with indirectly, through London.
These assumptions would have consequences. This is clear in what House wrote the president from his summer home on August 22, by which date the war in Europe had already escalated to shocking heights of destruction. “Germany’s success,” he wrote, “will ultimately mean trouble for us. We will have to abandon the path which you are blazing as a standard for future generations, with permanent peace as its goal and a new international ethical code as its guiding star, and build up a military machine of vast proportions.” In short, the whole legacy of the Wilson presidency, Wilson’s own bid for immortality, was going to be lost if Germany won the war. Once again the colonel was demonstrating that he knew which buttons to push.
America’s first serious entanglement in the war had almost nothing to do with the clash of vast armies across the European continent. What drew the United States in, snaring her in the arcane and rancorous diplomacy of the conflict’s first year, was the sea war between Britain and Germany. Paradoxically, this was a small war and a peculiar one, in the early going less a matter of battles between ships than a kind of scholarly dispute over what was and was not lawful in a new age of submarines and steam-powered surface ships made of steel. It gave rise to new and difficult questions about the rights and obligations of the ships of belligerent and neutral nations. The positions that Woodrow Wilson took on such matters raised the first doubts about the nature, the authenticity, of American neutrality. They made his administration complicit—on highly moralistic grounds, of course, this being the Wilson White House—in flagrant violations of international law. Ultimately, the interpretation that the president put on the laws of the sea would become the chute down which the United States slid into war with Germany.
The laws governing the conduct of ships in wartime, thorny and contentious, had been the subject of numerous international conferences, most recently in London in 1908 and 1909. That gathering’s mission was to produce a single treaty, approved by the seafaring nations, in which the rules and understandings that had accumulated over the generations could be combined, clarified, and given the force of law. It succeeded, but the resulting draft treaty was never consummated because Britain’s House of Lords failed to approve it. This was a setback, Britain being the world’s dominant sea power by an overwhelming margin, but the conference’s labors did not go to waste. The draft treaty was published as the Declaration of London and was universally accepted as the most authoritative statement of the law of the sea ever produced. Even the British Admiralty adopted it for the guidance of warship commanders.
These matters became suddenly urgent when, on August 6, 1914, the U.S. State Department received from London a list of materials that His Majesty’s government was declaring to be contraband and therefore subject to seizure on the high seas. The Declaration of London had upheld a time-honored distinction, relevant only in wartime, between “absolute” and “conditional” contraband. The former consisted of cargo that could have military use only, such as weapons and ammunition; it was always subject to confiscation when ships transporting it were intercepted. Conditional contraband included food, clothing, fuel, and other things with both civilian and military uses.
Among the questions raised by the British list was whether such distinctions were going to be observed in the war that was now beginning. The State Department, sensitive to the implications for the nation’s transatlantic trade, sent out a diplomatic note asking all the belligerent countries if they intended to adhere to the Declaration of London. The Germans replied that they intended to do so if their enemies did likewise. The British reply, not delivered until August 22, stated a willingness to adhere to the declaration with certain “additions” and “modifications.” These turned out to be significant: Britain was saying in effect that she would follow the rules to the extent that she found it to her own advantage to do so but no further. As if to underscore their determination to take an aggressive approach to this whole subject, the British also now sent what would prove to be the first of many additions to their list of things that would be dealt with as absolute contraband even when found on the ships of neutral nations. Food was conspicuous among the additions. This was a radical departure from precedent, a flouting of the law as then understood by all seafaring nations.
Robert Lansing, U.S. secretary of state, 1915–1920
He rose to high office by having “not too many ideas of his own.”
Upon taking office in 1913, Woodrow Wilson had appointed to the position of State Department counselor (or legal adviser) a specialist in international law named Robert Lansing. Fifty years old when the war began, married to the daughter of a former secretary of state, Lansing welcomed the opportunity to leave his law practice in upstate New York and join Washington’s social elite with its dinner parties and afternoon teas. Possessed of strong convictions if not a powerful personality, a picture of rectitude with his white hair and mustache and high white starched collars, from the start of the war he was candid about favoring Britain and her allies. But he was also punctilious in insisting that all nations, Britain no less than others, must observe the law. He found London’s August 6 note offensive and prepared a response. It was addressed to the American ambassador in London, with instructions to deliver it to the Foreign Office, and it rebuked Britain for departing from the Declaration of London and intruding upon America’s rights. It asserted that no belligerent had the right to seize neutral ships’ cargoes of food and dismissed Britain’s claims as “wholly unacceptable.”
This message was a legitimate assertion of American rights, solidly based on the law. If it had been sent as Lansing drafted it, it might have changed the course of history. But when Lansing gave it to the president for comment, Wilson passed it on to Colonel House. That was the end of it. House interpreted it in light of his recent experiences in Europe and saw immediately how distressing it would be to his new friends in London. He took it for discussion not to Lansing, not to Secretary of State Bryan, but to the British ambassador, Sir Cecil Spring-Rice. As House must have expected, Spring-Rice expressed horror. He declared that if such a note were sent, it would precipitate a crisis. Wilson, told of this, instructed Lansing to withdraw his draft.
What happened next was heavy with portents. House set out to draft a substitute note to the British government, and in doing so he recruited as collaborator none other than Ambassador Spring-Rice. The result included no assertion of the rights of the United States or neutral nations generally, and no objection to the classification of food and other nonmilitary materials as absolute contraband. The American ambassador was instructed to assure Sir Edward Grey “informally and confidentially” that the United States had no intention of challenging Britain’s claims. The point could not have been clearer: the United States was surrendering its freedom to do business with whomever it chose, its rights as a neutral nation. The White House did not even wish to communicate officially with the British government except in terms approved in advance by that government’s representative in Washingt
on. This set the pattern for everything that would follow.
There was no need for the United States to submit in this way. It was bestowing a great favor on the Entente, not yielding to necessity. Alone among the world’s neutral nations, America had sufficient naval and economic power to force the British to observe the law. That they would have done so is beyond question: Grey himself, years later, would acknowledge that his aim was to push these issues as far as possible without risking a breach in Anglo-American relations, maintaining only as tight a blockade as the United States would tolerate. This underscores the absurdity of Wilson’s claim, when he killed the Lansing draft, that sending it would risk war with Britain. The United States would not have needed to fire a shot to bring Britain into line. Simply disallowing shipments of goods to the United Kingdom would have done the trick. The British understood that better than anyone.
Cabled to London, the emasculated note had a powerful effect. Grey and his fellow cabinet members saw that they were free to stop cargoes of any kind from reaching the Central Powers. They no longer had to worry about the fact that the long-range guns of the warships bottled up in German ports, together with the ability of Germany’s submarines to stand guard outside those same ports, had rendered obsolete the kind of coastal “close blockade” permitted by law. Or about the fact that the broader blockade of the high seas that they intended to impose instead was of dubious legality at best. The Wilson administration was inviting them to do whatever they wished. Further unprecedented initiatives followed. March 1915 brought the blanket mining of great expanses of the North Sea, all of which London declared to be a war zone. Ships attempting to traverse the North Sea were declared subject to interception, even to being forced into English ports for the unloading and examination of their cargoes. These measures, too, were outside the law. In the ensuing months, Britain’s minefields would sink more neutral merchantmen than Germany’s Unterseeboote, soon known as U-boats.
Eventually a confident Britain would simplify matters by giving notice that she no longer recognized the Declaration of London, with or without modifications. London expected to hear no complaint from the United States about this, and received none.
And so it came to pass that the Royal Navy, with its blockade and with American acquiescence, set out to win a deadlocked war by imposing famine on the populations of central Europe. It defended the strategy in exactly those terms: First Lord of the Admiralty Winston Churchill declared with satisfaction that the aim was to “starve the whole population—men, women and children, old and young, wounded and sound—into submission.” When Austria’s ambassador in Washington complained of the blockade’s illegality, Colonel House made a diary entry that seems almost to cast doubt on his intelligence. “England is not exercising her power in an objectionable way,” he wrote, “for it is controlled by a democracy.” In fact, the extent to which the Britain of 1915 can be considered a democracy is arguable. Her hereditary aristocracy still had great power, and only 18 percent of adult males were eligible to vote. This compared, rather awkwardly, with 22 percent of Germans and 21 percent of Austrians. Even the republic of France allowed only 29 percent of males to vote. Britain’s treatment of subject peoples was arguably better than most—Belgium’s was incomparably the worst—but the millions living under her rule in Ireland, Egypt, and India could have attested that it had nothing to do with democracy.
It was now up to Germany, her trade links to most of the outside world severed, to decide how to respond. Her surface fleet dared not venture out of its home ports; despite the huge amounts invested in the years before the war, numerically it was so inferior to the Royal Navy that to put to sea would be to invite destruction. (The one great sea battle of the war, 1916’s inconclusive Battle of Jutland, proved the point.) The best answer was to get the help of neutral nations—meaning the United States, basically—in stopping the embargo on food. Or to work out a compromise with Britain, somehow. If those options proved infeasible, Germany had nowhere to turn but to the U-boats. But they were small, slow, and fragile and had never been tested in war. And exactly sixteen of them were ready for service at the start of 1915, fewer than Britain’s submarines, with the capacity to have perhaps half that many at sea at any one time. They hardly seemed likely to matter.
As far as the German home front was concerned, there was at this early point no urgent need to do anything. People knew of the blockade and were indignant about it, but it was far too new to cause serious inconvenience, never mind hardship. There was no way of being certain that it ever would cause real hardship. International trade and the economies of neutral nations including the United States, however, were affected almost immediately. In the first half of 1914, Germany’s gross national product and exports had exceeded Britain’s for the first time ever, the culmination of decades of strong economic growth for Germany and near-stagnation for Britain. Thirteen percent of U.S. exports had gone to the Central Powers, and now those markets were closed. The American economy was hit so hard that the New York Stock Exchange was shut down and remained so for four months. American producers and shippers complained loudly.
This might have worked to Germany’s advantage, making American acquiescence in the blockade politically unsustainable, had not Britain, France, and Russia put things right. Their hunger for the output of America’s factories and farms proved to be literally insatiable. Massive orders from the Entente eased resentment of Britain’s interference and then dissolved it: munitions and metals and the numberless other things needed to equip growing armies were demanded urgently and in virtually unlimited quantity. American producers soon had no reason to complain.
There was irony in this. Just a year earlier, responding to American manufacturers wanting to supply forces engaged in Mexico’s civil war, Wilson had said, “I shall follow the best practice of nations in the matter of neutrality by forbidding the exportation of arms or munitions of any kind from the United States to any part of the Republic of Mexico.” His reasons for departing from “best practice” in dealing with the Entente remain open to speculation.
Almost before the war’s first shots were fired, France asked America’s mightiest bank, J. P. Morgan and Company, for a loan of $100 million. Secretary Bryan, after conferring with the president, intervened. A statement that the two of them prepared jointly declared that “loans by American bankers to any foreign nation which is at war are inconsistent with the true spirit of neutrality.” Morgan and Company retreated.
“We are the one great nation which is not involved and refusal to loan to any belligerent would naturally tend to hasten a conclusion of the war,” Bryan said. He was right about that, as the months ahead would show, and right again when he said that if American banks lent to one side in the war, pressure would build in the United States to support that side further because “the value of the securities would be directly affected by the result of the war.”
“Money is the worst of all contrabands because it commands everything else,” Bryan also said. “I know of nothing that would do more to prevent war than an international agreement that…neutral nations would not loan to belligerents.”
Wall Street was disappointed but unwilling to proceed in the face of such emphatic official resistance. Its disappointment, however, would be short-lived. Morgan and Company was appointed U.S. purchasing agent for Britain and would become France’s agent as well. Over the next four years it would broker fully half of all Entente purchases in the United States, reaping commissions of $30 million by doing so. Its inability to make loans would be nearly as short-lived. Buyers need money, the Entente powers were consuming their financial reserves at an alarming rate, and by the spring of 1915 their purchases were generating an American economic boom. Soon the Entente governments would be joining U.S. banks and manufacturers in insisting that lending on a massive scale had become absolutely necessary.
Background
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Coming of Age
The United States of 1914 was an ungai
nly young giant of a nation, an economic colossus beset with growing pains. In the half century since the Civil War, the simple republic of yeoman farmers and tradesmen idealized by Thomas Jefferson had been utterly transformed. It had become an industrial powerhouse, dotted with bustling cities and dominated by a new class of business barons.
Numbers tell the story:
In 1870 the United States produced less than two million tons of pig iron and barely a third of a million tons of steel. By 1913 it was producing 31.5 million tons of pig iron and 31.8 million tons of steel. That was nearly double the output of its nearest competitor, Germany.
In 1869 there were thirty thousand miles of railway in the United States. By 1920 the total would be a quarter of a million. American refineries processed 26 million barrels of oil in 1880, 442 million forty years later. In 1866 the nation’s wheatfields were producing an average of 9.9 bushels per acre. By 1898 this had increased to 15.5, and the total acreage devoted to wheat had tripled. (Among the results of this advance, an example of the way growth could breed trouble, were low grain prices, financial distress for millions of farmers, and agrarian unrest.)
In the 1870s, when skilled workers considered themselves lucky to earn two or three dollars a day, America had approximately one hundred millionaires. This figure rose to approximately four thousand by 1892, and it would quadruple by 1916, when Britain and her allies needed almost everything America could produce, making the accumulation of a fortune almost easy for the bold and well placed. The number of U.S. cities with populations of more than one hundred thousand, nine in 1860, was fifty in 1910.