Chapter 134: At the End of One's Rope

Would the United States enter the war?

In the first half of 1915, the United States certainly would have joined the war had Britain and France—the British in particular—been willing to make concessions on key issues. Unfortunately, the British authorities missed this golden opportunity. By the time the British realized that the Allied powers would lose the war without American intervention, getting the United States to join was no longer a simple matter, and in fact, had become highly unlikely.

According to declassified post-war documents, Britain had been coaxing the United States to enter the war as early as the end of 1914. The secret contacts between the two sides were not held by government officials, but by bankers. In a sense, the greatest beneficiaries of this war were the bankers, for the fire of conflict destroyed everything, and that destruction was the very foundation upon which bankers reaped their massive profits. At the time, American bankers made it clear that for the U.S. to join the war, Britain had to agree to one condition: the recognition of the hegemony of the American banking system. This meant acknowledging the international status of the U.S. dollar, granting American banks control over international finance, and ensuring the dollar achieved at least equal status with the British pound.

Regrettably, the haughty British rejected this demand, which was not particularly unreasonable. The result was that while American banks began funding Britain and issuing massive war loans, they simultaneously provided loans to the German Empire. This led American bankers to formulate a strategy: hedge their bets on both sides of the conflict based on the battlefield situation, ensuring that the United States would emerge as the ultimate winner regardless of the war's outcome. It was precisely because of this that, following the Battle of the North Sea, American bankers began to favor the German Empire.

Thus, it is evident that if the British authorities had realized in late 1914 or early 1915 that winning the war would still mean losing their global hegemony, and had they rationally accepted—or at least shared—that hegemony with the United States, America would have joined the war. Sadly, no one in the British government grasped this at the time. It could even be said that until the end of the Battle of the North Sea, the British authorities lacked such clarity, still believing they could preserve their exclusive world dominance through victory, forcing any nation that dared to covet their position to back off and maintaining their singular rule. By the time the British realized the truth, it was far too late.

After the Battle of the North Sea, the British government officially began contact with the U.S. federal government, hinting that if the United States entered the war, Britain would recognize America’s equal international status, share global interests, and even acknowledge American maritime parity. The problem was that by then, the American authorities had come to realize that the risks and costs of intervention were far too high. To put it bluntly, the conditions offered by Britain were nowhere near enough to offset the price America would have to pay. Consequently, the American authorities—or rather, the interest groups pulling the strings behind the scenes, particularly those in banking and armaments—raised their demands: the Royal Navy would have to retreat east of the mid-Atlantic line after the war, relinquish all colonies along the Atlantic coast, grant the U.S. equal rights in all other colonies, and accept American leadership in international finance. Clearly, such demands exceeded what Britain could bear. After stalling for several months, with Tsarist Russia on the brink of collapse, Britain could no longer hold out.

The United States, by contrast, could watch the fire from the opposite bank. Given the situation at the time, if the U.S. simply maintained its previous policy of betting more heavily on whichever side held the advantage, it would be the war’s greatest victor. Simply put, whether the Allied powers or the Central Powers achieved final victory, the flames of war would destroy the European powers involved; the victors would be incapable of remaining world-class powers after the conflict. At that point, the United States, sitting outside the battlefield with its immense national strength, abundant resources, and large population, would naturally replace Britain as the global hegemon, or at least gain equal status and share the spoils of global dominance.

More importantly, this outcome was not determined by the subjective wishes of the British authorities. Even if Britain refused to admit defeat and managed to defeat the German Empire, the sheer scale of war exhaustion would reduce it to a second-rate power. Conversely, if the German Empire won, the massive war losses would prevent it from filling the power vacuum left by a collapsed Britain, and it would be in no position to immediately wage war against the U.S. Thus, the United States would logically succeed Britain. In such a scenario, whether or not the U.S. entered the war would not significantly affect the benefits it stood to gain.

Would the United States still actively join the war?

On December 24, Bonar Law arrived in Washington. Although Wilson welcomed his visitor with great warmth and hosted a special Christmas party for him at the White House, on the most crucial issues, Wilson displayed the resolve of a true statesman and refused to make easy concessions. For Bonar Law, the Christmas of 1915 was not an easy one. Interestingly, while Wilson was hosting Bonar Law, the U.S. Secretary of State was busy receiving an envoy from the German Empire. Even more unexpected for Bonar Law was that the day after he left Washington, the U.S. Congress approved a loan bill for the German Empire, raising the federally guaranteed loan limit to 4 billion Imperial Marks and allowing the German Empire to defer repayment of previous loans. Clearly, Bonar Law’s trip to Washington had yielded no substantive benefits.

This, of course, was also tied to the battlefield situation. Since November, the Imperial Navy had deployed over 300 ships to blockade the British mainland, including 120 submarines. To avoid offending the United States, the Imperial Navy established two blockade lines around Britain, particularly in the North Atlantic. The outer perimeter was patrolled by commerce-raiding warships; any ship passing through this zone was subject to inspection. If contraband was found, the ship would be escorted to an Imperial port to offload the goods before being allowed to depart. The inner perimeter was handled by submarines, which were ordered to sink any vessel entering the zone without warning, with the Empire accepting no responsibility. This was primarily to prevent the accidental sinking of merchant ships from other nations, especially the United States.

At the time, the Empire had issued a formal diplomatic note to the United States. The Empire was not stripping the U.S. of its right to free navigation; it merely required the U.S. to strictly observe the principle of neutrality by not providing war materials to either side. Furthermore, the Empire offered security guarantees for American ships sailing in the North Atlantic: Imperial warships would not attack American vessels in non-combat zones, though it could not guarantee the safety of those entering the combat zone.

This tight blockade produced two results: first, the volume of supplies reaching Britain decreased significantly; second, the flow of goods into the Empire increased sharply. The reason was simple: American enterprises were running at full capacity to produce supplies for the belligerents, and they were certainly not going to reduce production just because Britain was under blockade. Once massive amounts of goods were produced, they had to find a buyer. With Britain unable to purchase them, the German Empire naturally became the largest buyer of American goods and, consequently, America’s primary debtor.

However, at that time, the German Empire was not yet America’s largest debtor. The problem facing the British authorities was that to get the U.S. to join the war, they had to entice the U.S. to bet more heavily on Britain. This required obtaining more loans from America and using those funds to purchase American goods, making Britain the largest customer for American industry. To achieve this, Britain had only one path: reclaim command of the sea and impose a comprehensive blockade on the German Empire. Simply put, as long as American goods continued to flow into the German Empire, American banks would issue more loans to Germany, and the U.S. stake in Germany would grow larger. As long as the German Empire’s debt exceeded Britain’s, the United States could not possibly help Britain, but would instead support the German Empire.

Some might argue that English is the common language of the United States and that the white population is largely of British descent. But do not forget that among white ethnic groups in the U.S., those of German descent are second only to those of British descent, and there are nearly as many German-speaking Americans as there are English-speaking ones. More importantly, the United States had long been independent, and its relationship with Britain during and after its independence had been far from harmonious. Americans pursue American interests; they do not serve their former suzerain. If helping the German Empire could bring greater benefits to the United States, the interest groups that controlled American politics would not serve Britain.

If one were to say that Britain was completely out of options at this point, it would be too early. On January 22, 1916, First Sea Lord Fisher arrived in Washington to propose that the U.S. lease warships to Britain in exchange for colonies that interested the Americans. Clearly, the British were not stupid. Given the influence of the overall situation, the likelihood of American intervention was low. Therefore, if they could not force the U.S. into the war, securing some tangible benefits would be a significant consolation—and what Britain wanted and needed most were American warships. Looking further ahead, if British forces could use American ships to turn the tide, they might even succeed in dragging the U.S. into the conflict. Put simply, if the Royal Navy could win the war at sea and once again impose a total blockade on the German Empire, the U.S. would shift its bets back to Britain and might even enter the war directly to ensure a British victory. The British were, clearly, very shrewd.

The question remained, however: was leasing warships to a nation at war consistent with the principle of neutrality?