When the World War I broke out in 1914, with Austria-Hungary declaring war on Serbia. America’s first reaction was to stay out to conflict. President Wilson, in his speech to the Congress on August 19, 1914 said: "Every man who really loves America will act and speak in the true spirit of neutrality. The United States must be neutral in fact as well as in name during these days that are to try men’s souls. We must be impartial in thought as well as in action."All American leaders favored neutrality. While the entire European continent was divided into two camps: Germany, Austria, Hungary and Turkey as Central Powers were pitted against the Allied powers: Serbia, Britain, France, Belgium, Italy and Russia. As the war progressed, American public sympathies veered to the Allied side. Under the leadership of J.P. Morgan and Company many banking firms gave huge loans to the Allied powers.By international rules the neutral country could trade with any other neutral nation and also with other ’belligerent’ countries not facing a blockade. The Americans wished to continue trade with both belligerent sides.In the initial stages of the war the British blockade of Germany created problems for the U.S. The British tried to stop all trade between Germany and the rest of the world. They extended their blockade by controlling imports to other neutral countries like Holland, Denmark and Sweden with are geographically close to Germany The Americans protested against the violation of neutral rights though Wilson never put undue pressure on England as no U.S. citizen lost his life due to the blockade. Moreover, all cargo seized was paid for at war. It was the German use of submarines in the war that brought the U.S. in direct confrontation with Germany. The German submarines fired indiscriminately at neutral ships too. The last straw was when the British passenger liner ’Lusitania’ was sunk by German submarines on May...
