The brutal World War of 1914-1918 left much of Europe devastated and destitute. The gruesome totals were more than eight million dead, as both sides in the conflict lost the better part of an entire generation of males. The Allies had accumulated vast national debts of seemingly unmanageable proportions. In contrast, the United States suffered comparatively few combat deaths and emerged from the war with a significantly stronger economy. The profits from arms sales to the Allies were in the billions of dollars, and in the first decade after the war America accounted for nearly half of the world's industrial output.
Following the Versailles Treaty, the United States was thrust into the unfamiliar role of a world leader. Ultimately, American and European diplomats failed to maintain the peace, but it was not for want of trying. The U. S. Senate did refuse to join the League of Nations and the World Court, and during the 1920s America increasingly turned inward to deal with domestic issues and hemispheric affairs. Congress reflected this mood by passing restrictive immigration laws. But despite the influence of isolationists and "100% Americans," the United States took the initiative in attempting to secure international peace and world order through diplomatic means.
The United States twice proposed an international law court at Hague conferences before the Great War, but the World Court was based on arbitration. Secretary of State Charles Evans Hughes persuaded President Warren G. Harding to seek the Senate's approval to join the World Court, but the opponents to the Versailles Treaty blocked ratification. Despite this, Americans—including Hughes and another secretary of state, Frank Kellogg—served on the World Court. Furthermore, American observers were sent to the League of Nations, and the United States joined in several League-sponsored social programs, including those directed against international "white slavery," or prostitution, and illegal drug trade.
The United States was at the center of the complicated economic issue of war reparations and debts. The Versailles Treaty included a "War Guilt" article that claimed Germany was solely responsible for the World War. Two years later, an Allied commission saddled Germany with a reparations bill of about $33 billion, to be paid off at the rate of five billion gold marks per year. The German government, however, soon found it impossible to pay the reparations in gold and began printing paper money. This led to insurmountable inflation, wiping out the savings of the frugal middle class, and Germany defaulted on its annual payments. In the meantime, the congressionally-appointed World War Foreign Debt Commission placed the Allied debt to the United States at more than $22 billion, including interest.
Unfortunately, the global economic situation worsened during the 1920s and the Allied nations were unable to pay their U.S. debts after Germany defaulted on its reparation payments. When Congress insisted on the debt payments, European nations began portraying the U.S. as "Uncle Shylock," in large measure because most of the borrowed money had been spent in this country on armaments and agriculture products. Additionally, high American tariff barriers made it even more difficult for the debtor nations to establish a favorable balance of trade. In response, Charles G. Dawes, a Chicago banker, devised a plan to reduce Germany's annual reparations payments. Five years later, Owen D. Young, chairman of General Electric, headed a commission that lowered the annual payment to virtually the identical sum that the other European nations owed the United States. Germany and the European nations were able to resume paying off their U.S. debt until the global economic system collapsed with the Great Depression.
In late 1931, President Herbert Hoover put a one-year moratorium on both the reparations and debts payments. When European nations proposed to cancel 90 percent of Germany's reparations if the United States similarly lowered their debt payments, Congress refused. Some nations made an effort to meet their obligations when the moratorium expired, but in the end only Finland paid its debts in full.
In the wake of the World War, the United States pushed for an agreement on naval disarmament. Many felt the World War was caused by an armaments race in Europe and, with this in mind, the Republican administrations participated in several significant international naval conferences. The timing was right for such an initiative since the carnage of the Great War led to a revulsion against the use of military force to settle disputes between nations. Additionally, Americans were interested in protecting their empire in the Pacific without an expensive naval build-up. The British likewise wished to avoid the massive expenditures needed to maintain their supremacy on the high seas, and the Japanese sought to divert most of their military budget to ground forces in preparation for action on the Asian mainland.
After Congress overwhelmingly approved a naval disarmament resolution introduced by William Borah, a leading isolationist and chairman of the Senate Foreign Relations Committee, President Harding invited nine nations to attend the Washington Conference. Secretary of State Hughes stunned the conferees at the first session in November 1921 with his sweeping proposals for naval disarmament. He called for a ten-year moratorium on the construction of the largest warships, and declared that the United States was prepared to scrap 30 vessels under this plan. Hughes drew tremendous applause—even tears from some of his listeners—and, more importantly, his proposals were incorporated into a series of treaties.
The Four Power Treaty of 1921 between the United States, Great Britain, Japan, and France, prohibited new fortifications throughout most of the Pacific. The Five Power Treaty, signed the following year, included Italy. It set a limit for battleships based on a 5:5:3 ratio that gave the United States and Britain the most tonnage, but allowed the Japanese to become the dominant power in the western Pacific. (The ratio for France and Italy was 1.67.) The London Naval Conference of 1930 extended the moratorium on capital ships for another five years. Further attempts at disarmament—at Geneva in 1932 and London in 1935—ended in failure, however, due to the growing distrust and insecurity that erupted into the Second World War.
During the 1920s, an assortment of intellectuals, isolationists, and pacifists sought to prevent future wars by prohibiting the use of military force to settle international disputes. James T. Shotwell, a professor of international relations at Columbia University, wrote an influential essay calling upon all nations to "outlaw war" by making it illegal. In early 1927, French Foreign Minister Aristide Briand, hoping to capitalize on this growing sentiment in the United States, extended a public invitation to Secretary of State Kellogg to join in a mutual defense treaty. Kellogg at first ignored Briand's invitation, realizing that it was directed against Germany, but public pressure mounted from a petition drive that collected more than two million signatures. Determined not to be painted into a corner by Briand, Kellogg deftly employed Shotwell's proposition. He called upon all countries to declare war unlawful.
In August 1928, the Kellogg-Briand Pact was signed in Paris. Ultimately sixty-two nations joined in renouncing war as "an instrument of national policy" and supporting "pacific means" to settle international quarrels. Among the signatories were representatives from Germany, Japan, and Italy. The U.S. Senate overwhelmingly ratified the Kellogg-Briand Pact, but most senators were not naïve enough to believe their vote was anything more than a symbolic gesture. It was soon made clear that the efforts of both international idealists and diplomatic realists ignored the fundamental causes of conflicts among nations.
The Great Depression triggered a change of leadership in Washington, as the Democrats under Franklin Delano Roosevelt swept to power in the election of 1932. Domestic issues were paramount during President Roosevelt's first term, but the impact of the economic debacle influenced foreign affairs as well. Expanding international trade was a top priority, especially in the Western Hemisphere. Roosevelt built upon the foundation laid by prior Republican administrations to establish a more cordial relationship with Latin American nations. During the 1920s, the United States paid compensation or "canalimony" to Columbia for its loss of Panama and revenue from the isthmian canal and withdrew its military forces from the Dominican Republic.
In 1928 at the Pan-American Conference held in Havana, Secretary of State Kellogg refused to issue an ironclad pledge against future United States military intervention. Nonetheless, a change of attitude was manifest in the "Memorandum on the Monroe Doctrine" written by Undersecretary of State J. Reuben Clark and made public in 1930. Although it was ambiguously worded, the Clark memorandum seemed to promise an end to American military intervention based solely on the Monroe Doctrine.
The "Good Neighbor Policy" pursued by the Roosevelt administration scrupulously avoided the use of military force. The last of the American marines and soldiers sent to Latin America by Theodore Roosevelt and Woodrow Wilson were recalled from Nicaragua and Haiti. At the seventh Pan-American Conference in 1933, held at Montevideo, Uruguay, Secretary of State Cordell Hull agreed, that "no state has the right to intervene [militarily] in the internal or external affairs of another." The Platt Amendment, which gave the United States oversight authority over domestic Cuban affairs, was abrogated the following year. President Roosevelt personally attended the Pan-American Conference in Buenos Aires in 1936 and promised to consult with Latin American nations for our "mutual safety." The Good Neighbor Policy fostered hemispheric solidarity during the Second World War.
The Roosevelt administration was less successful in promoting unanimity among the 64 nations represented at London Economic Conference. In April 1933, two weeks before the conference convened, Roosevelt took the United States off the gold standard in an effort to forestall deflation and total economic collapse. Britain and several other European nations, with the chief exception of France, already had abandoned gold in a similar effort to manipulate their currencies. This led to extreme fluctuations of the rates of exchange and worsened the global depression by impeding international trade. To alleviate these conditions, the London delegates were expected to set the value of the world's major currencies, lower trade barriers, and discuss reducing the annual payments of the war debts owed the United States. The conference ended abruptly, however, when Roosevelt announced that he opposed any mandated currency stabilization until "the majority of nations learned to balance their budgets and live within their means."
In another move with serious international consequences, President Roosevelt extended diplomatic recognition to the Soviet Union. Republican Secretary of State Charles Evans Hughes had made it clear that the American government broke relations with the USSR because the communists repudiated the Russian national debt, confiscated American property in the Soviet Union, and supported communist propaganda within the United States. But non-recognition did not change Soviet policy, and American businessmen were interested in expanding their markets. Additionally, it was thought that the Soviet Union could restore a balance of power in Europe and Asia in light of the expansionist policies of Germany and Japan.
The United States extended diplomatic recognition to the USSR in 1933, and the Soviets promised to halt subversive propaganda, guarantee civil and religious liberty to Americans in the Soviet Union, and resolve the national debt and property claims issues at a later date. William Bullitt was sent to Moscow as the first United States ambassador, but he returned home disgusted by the Stalinist purges of the mid-1930s. Although it was past time that the United States and the Soviet Union formally open diplomatic channels, the USSR did not serve as an immediate barrier to either German or Japanese expansion.
Democratic and Republican presidents during the early twentieth century were committed to protecting American holdings in the Pacific. The Four Power Treaty, for example, allowed the United States to fortify Hawaii. The Philippines were another major concern. The secret Taft-Katsura memorandum, drafted by Secretary of War William Howard Taft during Theodore Roosevelt's administration, pledged the United States and Japan to recognize each nation's respective interests in the Philippines and Korea. In 1916, the Jones Act promised the Filipinos their independence, although at an unspecified time. The Tydings-McDuffie Act of 1934 affirmed Congress's intention to grant independence to the Philippines after ten years as an autonomous commonwealth under the protection of the United States. A national constitution was drafted and a president elected, but the Japanese conquest of the Philippines during the Second World War upset the timetable. Filipino independence was formally granted on July 4, 1946, after the surrender of Japan.
During the 1920s and 1930s, as the communists were consolidating their control in the Soviet Union, right-wing totalitarian states ruled by dictators or military cabals emerged in Europe and Japan. Benito Mussolini set the pattern for these governments when he gained power in Italy in 1922. Mussolini's fascist movement emphasized aggressive nationalism, bombastic patriotic fervor, and a socialistic partnership between government and big business. "Il Duce," or "the leader" as he styled himself, sent Italian troops into the African nation of Ethiopia in the fall of 1935. The League of Nations imposed economic sanctions, but could not prevent the annexation of Ethiopia. Mussolini thus set into motion his grandiose plans to carve out a new Roman empire. Unfortunately, his dreams of territorial expansion were soon eclipsed by another fascist dictator.
Adolf Hitler and the National Socialist Party—the Nazis—rose to power in large measure by playing on the German public's sense of betrayal directed against the Versailles Treaty and the reparations burden. With the economic collapse of the democratic Weimar Republic, Hitler and the Nazis seized their chance. On January 30, 1933, Hitler became chancellor, and embarked on the plan he created in his autobiographical book Mein Kampf. With the acquiescence of the Reichstag, the national legislature, the "fuhrer" established one-party rule, stripped Jews of their citizenship, and denounced the disarmament clauses and territorial losses dictated by the Versailles Treaty. Hitler withdrew Germany from the League of Nations, and pledged to achieve lebensraum ("living space") for the German people. American ambassador William Dodd ominously warned from Berlin that most Germans would support the fuhrer even in "outright conquest."
Hitler announced in March 1935 that the Third Reich—a synonym for Nazi Germany—was beginning a re-armament program that included an army of 500,000—five times that allowed under the Versailles Treaty. Britain and France protested, but took no military action. In America, the depth of the Great Depression and disillusionment over America's participation in the "War to End All Wars" was reaching a peak. Since the United States had never ratified the Versailles Treaty, President Roosevelt and an increasingly isolationist Congress left the entire matter to the European allies.
As Mussolini and Hitler rose to power, a similar situation was unfolding in Japan. The tradition-bound Japanese military became more democratic after the World War, paving the way for young patriotic commoners to enter the officer ranks. These men and their commanders were determined to make Japan a world power, and they planned to use the "Showa"—the reigning name of Emperor Hirohito—as the figurehead for territorial expansionism. China, a natural geographic target for the Japanese militarists, was torn by civil war between the Nationalist forces led by Jiang Jieshi (Chiang Kai-shek) and the communists under Mao Zedong.
In September 1931, the Japanese began a military offensive against the Chinese in Manchuria. This was a direct violation of the League of Nations charter, the Nine Power Treaty, and the more recent Kellogg-Briand Pact. The League of Nations sent a commission, headed by the Earl of Lytton, to investigate the Manchurian crisis. When the Japanese expanded their attack, Secretary of State Henry Stimson responded in January with the so-called "Stimson Doctrine," of non-recognition. Drawing upon the Open Door policy and the Nine-Power Treaty, Stimson pledged that the United States would refuse to recognize any military conquests. The Hoover administration, however, was not prepared to back up this policy with force, and the Japanese established a puppet regime—"Manchukuo." The Lytton Commission eventually urged the withdrawal of both Japanese and Chinese forces from Manchuria and the creation of an autonomous government for the region. The Japanese, however, withdrew from the League and occupied Manchuria until 1945.
As war clouds gathered over Asia and Europe during the 1930s, disillusioned Americans were determined not to be drawn into another world war. The root causes of this isolationism were many. Well known historians, including Charles A. Beard, absolved Germany of total responsibility for the Great War, and emphasized that the reparations burden had led to the failure of the Weimar Republic. Recalling the end of the Progressive movement and the Espionage and Sedition Acts, social reformers feared that another world war would end the New Deal and trample on civil liberties. Some well known public figures, including Charles Lindbergh and Senators William Borah and George Norris, swelled the chorus that condemned America's participation in the Great War.
The most effective argument raised by the isolationists—although not necessarily the most valid one—was that America's entry into the World War was dictated by munitions makers and arms dealers who profited from the conflict. American bankers, who had loaned billions to the Allies and wanted to protect their investments, were also singled out. The March 1934 issue of Fortune, an influential business magazine, contained an article titled "Arms and the Men," that blamed the armaments industry for encouraging and then prolonging the Great War. This thesis was popularized in a Book-of-the-Month Club selection written by Helmuth Englebrecht and Frank Hanighen, The Merchants of Death, published that same year.
In response to such charges, Senator Gerald Nye, a progressive Republican from North Dakota, chaired a committee that investigated America's entry into the World War. The Nye Committee's hearings attracted immense public attention, as J. P. Morgan and several du Ponts were among those called to testify. The Committee concluded that economic interests played a major role in American military intervention on the side of the Allies in 1917. Senator Nye minced no words when he claimed that the United States joined the fight "to save the skins of American bankers who... had two billions of dollars of loans to the Allies in jeopardy."
The Nye Committee's findings, coupled with the Japanese and Italian military incursions, led to the passage of the Neutrality Acts. Congress clearly hoped to prevent the United States from being dragged unwillingly into another worldwide conflict. The first Neutrality bill passed Congress with little debate in August 1935. It prohibited any arms and munitions trade with warring nations and authorized the president to ban Americans from travel on belligerent vessels. Obviously, Congress hoped to shackle the "merchants of death" and prevent another Lusitania incident. President Roosevelt, however, warned that an impartial arms embargo favored an aggressor and might "drag us into war instead of keeping us out." Overwhelming public opinion and an implacable Congress, however, forced the president to sign the bill into law.
In early 1936, the Second Neutrality Act added an additional sanction to the first law, prohibiting loans to belligerents. Both Neutrality Acts were due to expire on May 1, 1937, but Congress extended them on that day. By that time, the Spanish Civil War was raging, and a Third Neutrality Act kept the basic provisions of the previous laws and added that the president could impose the restrictions in cases of "civil strife." Significantly, the new law also allowed the sale of non-military goods to belligerents on a "cash-and-carry" basis; that is, warring factions had to pay for the goods in full and transport them on their own ships. Most of the law's provisions were made permanent, but the Cash-and-carry proviso was due to expire in two years.
With Europe on the brink of war in the spring of 1939, the Roosevelt administration pushed Congress to repeal the Neutrality Act. Isolationists, however, refused to budge, and Congress adjourned without acting on the president's request. Three weeks after German troops moved into Poland and the Second World War commenced in earnest, Roosevelt called Congress into special session and requested the repeal of the arms embargo. He also asked Congress to allow belligerents to purchase arms and munitions on a cash-and-carry basis.
After six weeks of bitter debate, the Fourth Neutrality law was passed over Republican protests. Roosevelt got what he wanted, but the isolationists carried a few points. American citizens were forbidden to sail on belligerent vessels, and U. S. ships were blocked from belligerent ports and (in certain cases) from combat zones. By 1939, Congress was prepared to tilt toward those nations that controlled the high seas—especially Great Britain—but the final Neutrality Act was of no benefit to China and many other nations fighting the Axis Powers of Japan, Germany, and Italy. It remained to be seen if isolationism and neutrality would keep the United States out of World War Two.