World War I—The Great Banker Bailout

World War I resulted in an estimated 15-22 million deaths, along with countless injuries and widespread property destruction. The harsh realities of war are illustrated in quotes from literature, showing the gruesome conditions faced by soldiers. The entry of the United States into the war, contrary to President Woodrow Wilson's earlier promises to avoid such conflict, largely benefitted American bankers who had been financing the Allies. Wilson recognized that the war was rooted in commercial and industrial competition but failed to acknowledge how U. S. bankers were benefiting from the situation.

Historian Niall Ferguson pointed out that J. P. Morgan's financial interests in Britain positioned him to benefit greatly when the U. S. entered the war in 1917. The Federal Reserve was able to finance this entry by greatly increasing the money supply, thus avoiding direct taxation from the American public. This situation enhanced the power and central authority of the Federal Reserve and its close connections with bankers and industrialists.

American banks, especially Morgan's, profited significantly, acting as both financial supporters and suppliers of war materials to the Allies. The money loaned by the U. S. to England and France often returned quickly to American companies, enriching those banks and businesses tied to Morgan. This financial interconnection played a vital role in pushing for U. S. involvement in the war, as the prospect of loss prompted financial interests to advocate for entry into a conflict that benefitted them.

The war created new opportunities for the banking system and large companies, which had previously been struggling financially. The influx of war profits led to a significant increase in the number of wealthy individuals in America, as war contracts funneled money from the federal government to the richest families in the country. This process of wealth redistribution mainly benefited those controlling banks and industries connected to the war effort.

General Smedley Butler highlighted how a small number of people profited immensely from World War I, with at least 21,000 new millionaires emerging from the conflict. U. S. involvement in the war ensured an Allied victory and prevented a negotiated peace, leading to severe consequences for Germany and contributing to the rise of oppressive regimes in the following decades.

In summary, the U. S. entry into World War I was driven by financial interests that prioritized their wealth and stability over the human costs of war. The profit motive connected to the conflict had lasting ramifications, reflecting a pattern where wealth was derived from political means rather than voluntary market actions, altering the course of history and leading to significant turmoil in the 20th century. 

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