10 - The Role of the Banker in Transatlantic History: J. P. Morgan & Co. and Aid for the Allies, 1914-1916

Summary

The outcome of World War I hinged largely on the economic and financial resources that each side commanded. To a considerable extent it depended just on bankers and financiers in Great Britain and the United States. Georges Clemenceau illustrated this by his remark, “War is too serious a matter to entrust to military men.” The United States played an increasing role in supplying the Allies from 1915 until the end of the war and thereby contributed considerably to Germany's defeat in 1918. In the first eighteen months of the war the American banking firm J. P. Morgan & Co. took the lead in shaping America's material and financial aid to the Allies. J. P. Morgan assumed the risk and the responsibility of exploring the hitherto uncharted field of large-scale private financing of European needs at a critical juncture. This venture proved successful in facilitating the unprecedented flow of American resources in support of Allied warfare in Europe. Yet the initiative came back to haunt the banking concern in 1936, when those who had marshaled aid for the Allies in World War I had to face hostile interrogation from the Senate Special Committee Investigating the Munitions Industry, chaired by Senator Gerald P. Nye (R-North Dakota).