WILLIAM BULLITT, employed in 1915 as a journalist by the Public Ledger back home in Philadelphia, had his chance to return to Europe when yet another American businessman decided to do something about the European war. Henry Ford, the billionaire auto magnate, had been persuaded by a Hungarian pacifist, Rosika Schwimmer, that the warring countries of Europe wanted to stop fighting, and would do so if only a disinterested party would intervene to offer mediation. Ford thereupon chartered the Oscar II, a steamer of the Scandinavian Line, to transport himself and a delegation of fellow peacemakers to Europe to offer to mediate. It was November 1915, and Ford set a tight deadline by pledging that “we’ll get the boys out of the trenches by Christmas.” Bullitt was assigned to cover the story, and syndicated his reports.
The Oscar II sailed December 4, 1915, with 149 peace delegates aboard. Bryan came to see it off, and compared it favorably to Noah’s Ark. Bullitt reported that “10,000 howling men and women” were at the dock to watch them leave, and that as the ship shoved off, one man “plunged into the river … saying he would swim behind the ship to ward off torpedoes.”
Ford’s “peace ship,” a subject of jokes and laughter, docked in Norway, where Ford disembarked and—perhaps conscious of how ridiculous he had been made to appear—fled back to America. The delegates toured Europe throughout 1916; but the press and public lost interest in them.
The experience of the Ford peace delegation proved to be a foretaste of things to come. As Americans traveled through the twentieth century, they often were to find themselves voyaging in foreign waters seeking in all sincerity and with the best of intentions to do good—and yet somehow appearing foolish, or worse.
8
AMERICA QUARRELS WITH BOTH SIDES
SOON AFTER BRITAIN WAS DRAWN into the German war in Europe, TR wrote to his close friend Ambassador Sir Cecil Spring-Rice that “it is a singular thing to reflect that seventy years ago, when there was practically no Irish or German vote in this country, we would have been unquestionably anti-English.… Now there is a very large German and Irish vote, and yet that does not make the slightest difference in the trend of national feeling being favourable to England.”
A poll of 400 newspaper editors by the magazine Literary Digest in the autumn of 1914 suggested that, with wide regional variations, arguably based on ethnic origin, most Americans did not take sides in the war, but that the minority who did were largely pro-Allies. At least in the South and East, and certainly in Washington, D.C., there was considerable sympathy for the Allied cause, but no disposition to give practical expression to it. No significant body of opinion anywhere in the United States favored entering the war, or even considered doing so.
In the summer of 1914 Americans were preoccupied with problems of their own. The economy had been in a slump, as had Wall Street; so the domestic outlook already was bleak when, like a tornado that strikes without warning, the news arrived that Europe’s armies were mobilizing for war. For a long time the growth of America’s industry and trade had been financed by European investors; were they—all at the same time—to try to cash in their holdings in order to pay for the war, it would be in the nature of a run on the bank, and the United States would face ruin.
Hence Wall Street’s violent reaction to the news that in far-off central and eastern Europe, Austria-Hungary and Russia were mobilizing their armies. Thursday, July 30, saw the biggest one-day fall in prices on the New York Stock Exchange since the panic of 1907. Worse threatened to come. The major bourses of the Continent had shut down by the thirtieth; all of them had gone out of business indefinitely as of the three p.m. close in New York that day. At ten o’clock the following morning, the world’s principal financial center, the London Stock Exchange, closed its doors. Winston Churchill, then Britain’s youthful First Lord of the Admiralty, wrote from London to his wife that the city’s financial district “has simply broken into chaos. The world’s credit system is virtually suspended. You cannot sell stocks & shares. You cannot borrow. Quite soon it will not perhaps be possible to cash a cheque. Prices of goods are rising to panic levels.”
At dawn on Friday, July 31, the New York Stock Exchange, which was scheduled to open its doors as usual at 9:30 a.m. and to commence trading at 10 a.m., was the only major bourse in the world still in business: for practical purposes the only place remaining on the planet where stocks and bonds still could be exchanged for cash. Early that morning Wall Street stockbrokers arrived at their offices to find so many accumulated sell orders—an avalanche that had arrived overnight for execution at Friday’s opening—as to threaten utter collapse. Heeding a summons from the leading firm in the financial district, Wall Streeters rushed to the headquarters of J. P. Morgan and Company, where Henry Davison, the Morgan partner for whom Willard Straight had worked in supporting the government of China, took command.
Even as the leaders of Wall Street met at Davison’s call, the doors of the Corinthian-pillared seven-storied temple of commerce that was the New York Stock Exchange were opened for business, and those who worked there streamed inside to take up their positions. A few minutes before 10 a.m., the man who was to ring the gong signaling the start of trading was about to do so when the president of the Stock Exchange, who had rushed over to Morgan headquarters to ask what to do, called by telephone to order the Exchange to close.
The financial situation was terrifying (“THE CREDIT OF ALL EUROPE HAS BROKEN DOWN ABSOLUTELY …,” Davison cabled to his partner Thomas Lamont, who was in Montana fishing for trout), but Davison presciently sensed that great opportunities accompanied the grave dangers; “WE WILL SOON GET TO RIGHTING THINGS,” he concluded.
AS HOSTILITIES BEGAN, Britain’s Royal Navy took control of the Atlantic Ocean, and soon effectively blocked all commerce by sea with Germany and her neighbors. This was in flagrant violation of the tenets of international law as understood by the United States and most other countries. Americans believed it their right as neutrals to continue trading with both sides in wars, and had regarded their freedom of trade as central to their world policy ever since the first days of their Republic. They had protested in vain when Britain blocked their trade with the Continent during the Napoleonic wars a century before; and, in part on that issue, had fought the War of 1812.
A few weeks after the European war started, President Wilson expressed himself strongly against the developing British policy in a conversation with his adviser Edward House. According to House, Wilson “read a page from his history of the American people telling how during Madison’s administration the War of 1812 was started in exactly the same way as this controversy is opening up.… The President said: ‘Madison and I are the only two Princeton men that have become President. The circumstances of the War of 1812 now run parallel. I sincerely hope they will go no further.’ ”
Although House warned the British government of the President’s mood and of stiff American protests to come, the British carried their blockade strategy into effect, cutting off the Central Powers, Germany and Austria-Hungary, from overseas sources of supply. British officials treated the official American position as all talk and no action, and were vindicated in doing so when the Wilson administration failed to back up its words with deeds.
In 1914 Americans had a sense that they were becoming a power in world politics, and yet their neutral rights were being disregarded by the Royal Navy as high-handedly as ever before. For most of America’s existence, Great Britain had been the country’s chief foreign enemy, and now again it was Britain who denied Americans their due. So it signified a great change in American attitudes toward Britain that Wilson did not pursue the quarrel with any great warmth.
Of course, Washington sent letters of protest to London, but they were of no avail. Diplomacy proved useless, while the alternative, the application of force, appeared impractical: the American fleet, of which Secretary Daniels and Assistant Secretary Roosevelt were so proud, was efficient and modern, and was the third-largest navy in the world, but it was no matc
h for the Royal Navy, the largest and most powerful fleet of all.
There seemed to be nothing the United States could do to break Britain’s illegal blockade. Yet as time went on, a question arose as to whether the Wilson administration was trying as hard as it might. As 1914 drifted into 1915 and 1916, it transpired that while Britain might be trampling on America’s neutral rights, the United States had a powerful motive for looking the other way: it paid to do so.
WILLARD STRAIGHT, the thirty-four-year-old founder of The New Republic who worked at the House of Morgan, claimed to have suggested to Henry Davison in the autumn of 1914 that all British purchases in the United States be coordinated through a single agent. It was a sensible suggestion, because the British had stepped up their buying in the United States when war began and had been bidding up prices on themselves. Davison and Straight boarded a ship for Great Britain in November 1914, and in London negotiated an agreement that established Morgan as Britain’s agent.
With so much purchasing power at its disposal, Morgan was able to drive a hard bargain with U.S. suppliers to keep prices under control. To head Morgan’s newly created export department, Davison’s partner Thomas Lamont chose Edward R. Stettinius, Sr., a former commodities speculator, who assembled a hardworking staff that eventually numbered 175 people.
So immense was the scale of British wartime buying that, as a historian of the House of Morgan has written, “Stettinius became the single most important consumer on earth.… He bought, shipped, and insured supplies on an unprecedented scale.… Each month, Stettinius presided over purchases equivalent to the world’s gross national product a generation before” (emphasis added). Morgan encouraged American companies to expand and create mass production facilities in order to meet Britain’s increasing orders, and loaned them the money to do so.
The war was dramatically changing the terms of world trade. For the United States between 1914 and 1916, the positive balance of trade (the dollar amount that tells how much more Americans sell to foreigners than they buy from foreigners) rose 600 percent.* In a short time the United States had become the arsenal of the Allies, expanding its industrial capacity and converting to war industries with a speed that German and other foreign observers found stupefying. Henry Adams, the doyen of Anglophile Washington society, wrote that “apparently we are working day and night for the Allies, but also for money.”
Britain, although still the world’s banker in 1914, needed credit to pay for these sudden and enormous purchases from the New World. At first Wilson agreed with Bryan that it would be unneutral to allow American banks to make war loans to the Allies, but within weeks he changed his mind; these loans were financing the sales to the Allies that were making America prosperous. As Britain’s banker in the United States, Morgan arranged the largest foreign loans in Wall Street’s history. In August 1915 Wilson again thought of cutting off these financings, but was dissuaded by his cabinet; without further loans to the Allies, warned one cabinet member, there “would be … industrial depression, idle capital and idle labor, numerous failures, financial demoralization, and general unrest and suffering among the laboring classes.”
During the period of America’s neutrality in the European war, U.S. investors bought $2 billion of Allied bonds and only $20 million of German bonds, a ratio of a hundred to one. As trade with Germany and Austria had been cut off by the Royal Navy while billions in U.S. exports went to the Allies, German-American organizations lobbied Congress for an embargo on all arms sales to either side—effectively putting an end to sales to the Allies, since none were being made to Germany. Despite the blow this would have struck at the country’s new prosperity, there was substantial support for such an embargo throughout the country (outside the Northeast), and in the Senate it secured thirty-six votes out of ninety-six. Particularly in the heavily German-American Middle West, the hated Morgan bank and the East Coast financial interests it symbolized were seen to be attaching America to the Allied cause out of greed. Charles Lindbergh, a congressman from Minnesota, was typical of those in Middle America who denounced the “money interests” for pushing the country into the Allied camp in order to rake in inordinate profits.
Indeed, what was taking place was perhaps the largest transfer of wealth in a short time that the world had known. On the sidewalks of New York’s financial district, activity perked up; what began with “four boys and a dog” became a hundred stock brokerage firms buying and selling stocks and bonds out of doors, until in the spring of 1915 the New York Stock Exchange opened its doors for business once again. By then, no danger was posed by foreigners who wanted to sell; Americans now had the money to buy.
Years later, when the war in Europe was over, it could be seen that the United States, which had been one of the world’s principal debtor nations in 1914, owing about $3.7 billion, had become the world’s creditor, owed about $3.8 billion. A net effect of the war was that much of Europe’s wealth was transferred to America in payment for arms and other supplies, causing the United States to replace Great Britain as the leading financial power on the planet.
BRITAIN’S BLOCKADE of Germany was contrary to international law, and so was Germany’s response to it. Unable to challenge the Royal Navy on the surface of the Atlantic, imperial Germany launched a submarine campaign, sinking, without warning, Allied shipping and also ships bringing supplies to the Allies.
In March 1915 a German U-boat torpedoed a British steamship called the Falaba off the coast of Africa. One hundred eleven lives were lost, one of them an American passenger. On several counts this violated prewar rules on international law. Under those rules, the U-boat should have surfaced and warned the Falaba before opening fire. In any event, the German commander should have taken steps to ensure that the American, as a neutral, would not be harmed in the fighting.
Within the American government, responses to the Falaba incident were various. Bryan argued that in wartime Americans who choose to travel on the ships of one side or another must do so at their own risk—for it is only to be expected that the ships of a nation at war will be attacked. State Department Counselor Robert Lansing claimed that a time for decision had arrived: the United States should either confront Germany on the legality of submarine warfare or back down and do nothing. Wilson was uncertain what to do.
On May 1, 1915, advertisements placed by the German embassy appeared in newspapers along the eastern seaboard of the United States warning Americans not to travel on the British liner Lusitania, a Cunard steamship about to cross from New York to Europe. Only one Lusitania passenger heeded the warning and shifted to another ship.
Anger against Great Britain was gathering in the country. Three miles outside New York harbor, British warships waited to stop and board vessels, and to detain those bound for neutral ports. On the other side of the ocean, the Royal Navy prevented American ships from docking in neutral Norway, Sweden, or Denmark; and British authorities had intercepted and detained nearly a half-billion dollars of meat products that Americans had exported to European destinations. In Boston, anti-British demonstrators demanded the creation of an enlarged merchant fleet to break through the blockade.
But sentiment in the United States shifted violently on the morning of May 7, 1915, when a German U-boat torpedoed and sank the Lusitania as it steamed past the coast of Ireland. The lives of more than 1,000 passengers were lost, including more than 100 Americans. The ship went down in less than fifteen minutes.
Americans were shocked but also confused. They denounced Germany angrily, but few of them (only 6 percent in a poll of newspaper editors) believed that the United States should punish Germany by declaring war. Even those swept away by anger sometimes reconsidered later. A journalist who happened on Walter Lippmann on the street the day after the sinking reported that Lippmann was all for going to war to avenge the Lusitania. A month later Lippmann wrote to The New Republic correspondent in Paris that “we here … want to avoid getting into the struggle, if it is at all possible. We have everything
to lose and nothing to gain by taking part in it. It would only mean that the last great power was engulfed in the unreasonableness of it all and that American lives far from being safer would be a great deal more in danger.”
Wilson’s predecessor, William Howard Taft, wrote him to say that Congress would back him if he chose to ask for a declaration of war. Others advised the President otherwise. He was navigating in uncharted waters, and the tides of opinion were treacherous. He was preoccupied with personal matters (he was courting the lady who later became his second wife) and always found it difficult to concentrate on more than one matter at a time.
When Wilson decided to protest against Germany’s behavior without also protesting against that of the Allies, Secretary Bryan resigned. “You people are not neutral,” Bryan told the cabinet. “You are taking sides.” In resigning, Bryan also complained that the President’s adviser Edward House had been the real secretary of state.
On the other hand, supporters of TR found Wilson’s stance against Germany too weak. TR’s longtime political partner, Henry Cabot Lodge, the Republican foreign policy leader in the Senate, later claimed that this was the moment of no return in his decision to oppose Woodrow Wilson. Later, too, Germany’s ambassador wrote in his memoirs that Wilson’s conduct in the Lusitania matter left him “firmly convinced” that the President “would never initiate a war with Germany.” The kaiser’s government may also have been confident of this because, in a moment of indiscretion before resigning, Bryan had told the Austro-Hungarian ambassador that the United States had no intention of going to war.
Americans who were out of sympathy with the pacifist inclinations of the administration made their views known. On the initiative of General Leonard Wood, an associate of TR’s and now commander of the army’s Department of the East, a military training camp for civilian volunteers was established at Plattsburg,† New York, in the summer of 1915. It provided a rallying point for TR’s young supporters who favored his policy of preparedness and were opposed to the do-nothing attitude they ascribed to Wilson. Drawn especially from Wall Street and the other financial centers of the Atlantic seaboard, 1,600 ambitious young professionals took time off from their careers to be trained in the basics of soldiering by regular army officers.
In the Time of the Americans Page 11
