Commentaries about World War I frequently talk about causes and consequences but almost never mention the enablers. At best, they might mention them approvingly, as if we were fortunate to have had the Fed and the income tax, along with the ingenuity of the Liberty Bond programs, to finance our glorious role in that bloodbath.
Economist Benjamin Anderson, whose Economics and the Public Welfare has contributed greatly to our understanding of the period 1914-1946, and is a book I highly recommend, nevertheless takes as a given that the Fed and income tax had a job to do, and that job was supporting U.S. entry into World War I. After citing figures purporting to show how relatively restrained bank credit expansion was during the war, he writes:
We had to finance the Government with its four great Liberty Loans and its short-term borrowing as well. We had to transform our industries from a peace basis to a war basis. We had to raise an army of four million men and send half of them to France. We had to help finance our allies in the war, and above all, to finance the shipment of goods to them from the United States and from a good many neutral countries. [p. 35]
We had to do none of these things.
Only the government made them necessary, and the government was not acting on behalf of its constituents when it formally entered the war in April, 1917. The U.S. was not under serious threat of attack. The population at large, Ralph Raico tells us, “acquiesced, as one historian has remarked, out of general boredom with peace, the habit of obedience to its rulers, and a highly unrealistic notion of the consequences of America’s taking up arms.” Later on he reports that
In the first ten days after the war declaration, only 4,355 men enlisted; in the next weeks, the War Department procured only one-sixth of the men required.
Bored with peace they may have been, but it was hardly reflected in the number of volunteers. For more details about US response to the war see this.
Hellbound and Down 