The Perversion of Peace

Abstract

By the time the war in Europe ended, the United States had emerged as the principal industrial and financial power in the world political economy. Its economy accounted for more than 50 percent of all manufacturing in the world. Its banks had lent some $2 billion to the Allies between 1914 and 1917, and during the next year and a half the U.S. government extended about $7.5 billion worth of credits to them. At home, war-time government spending had stimulated the economy to the advantage of corporations and the average citizen, as the manufacturing and agricultural sectors supplied goods for domestic and foreign markets. Immediately after the war, the Wilsonian corporatist, “promotional state,” having successfully aided the Allies in securing victory, now prepared to compete against them for a greater share of the world markets and resources, a particularly pressing concern as demands for American goods in the Allied markets dropped.¹ U.S.-Turkish trade relations had, with the exception of a handful of products, virtually stopped after diplomatic relations were severed in April 1917, and both nations were determined to resume their economic ties. In the meantime, various interests at home competed to shape U.S. foreign policy toward the tattered Ottoman Empire.