The New Empire of Debt: The Rise and Fall of an Epic Financial Bubble (19 page)

Why look for the causes of such a preposterous war deep in the
isms
that fill history books? The real causes are closer at hand—in the pompous twit of a pedant like Wilson or the bluster of Theodore Roosevelt or in Wilhelm’s insecure strut and Bethmann-Hollweg’s broken heart. They, and millions more, found the prospect of a short, sanitary war charmingly distracting.

WILSON’S WAR

America had no dog in the European fight. During his reelection battle of 1916, Woodrow Wilson correctly read the public mind. “He kept us out of war,” was his campaign slogan.

But there was no glory in sitting on the sidelines.Wilson longed to get into it and imagined that he could transform the war—and the world that came out of it—in his own image. First, it would be a world war, not one confined to the Europeans. And, second, it would have a high-minded purpose: to free the world from tyranny. Never before had such a bloody enterprise been undertaken for what appeared to be such a high-minded reason.

The reasons were just fluff. The real reasons were the same sordid, complex instincts that always lure people to war and ruin. Even the dumbest species have their alphas and omegas—their lead dogs and their drones and mules.

“If it a fearful thing to lead this great peaceful people into war, into the most terrible and disastrous of all wars, civilization itself seeming to be in the balance. But the right is more precious than peace, and we shall fight for the things we have always carried in our hearts,” said Wilson.

“To such a task we can dedicate our lives and our fortunes, everything that we are and everything that we have, with the pride of those who know that America is privileged to spend her blood and her might for the principles that gave her birth and happiness and the peace which she has treasured. God helping her, she can do no other.”
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With this last whoosh of inflated language, the empty bubbles of Mr. Wilson’s rhetoric practically exploded. Since the Gettysburg Address, no one in American history had said such a preposterous thing in public that wasn’t followed by contemptuous laughter. But it was hardly the last time Americans were to hear such things. In 1961, President Kennedy offered another blank check to the forces of improvement: “We will pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty.”
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(Science may be cumulative, but war, finance, and love operate in cycles. After 14 years of paying for the Vietnam War, Americans figured it was time to retrench. Richard Nixon addressed the sentiment of the time at his inauguration in 1973:“The time has passed when America will make every other nation’s conflict our own, or make every other nation’s future our responsibility, or presume to tell the people of other nations how to manage their own affairs.”
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Nixon was wrong. The time had not passed—it was hardly beginning.)

A cynic might dismiss Wilson’s high-mindedness as pure claptrap. But it was more than that. The professor of government had managed to take an idea and turn it inside out. He now proposed to waste America’s blood on what was practically the exact opposite of the “principles that gave America birth” and squander the happiness and peace she treasured in the process. The Founding Fathers couldn’t have cared less about whether Germany or England won the war, to say nothing of the government structure in those countries. They almost certainly would have despised Wilson’s busy-bodying. If they had been subject to the Espionage and Sedition Acts that Wilson put in place to stifle criticism, they probably would have revolted all over again.

Then, as now, critics hacked away at the limbs and branches of Wilson’s war fever.What else could they do? They challenged the leafy reasons. None could get at the noxious roots.

After Wilson’s speech, practically every member of Congress was on his feet. Amid yelps and war whoops, the world’s greatest deliberative body convulsed with excitement. Finally, the war was on.

But there was one important exception: Senator Robert La Follette. A founder of the Progressive Party, La Follette was one of the reasons Woodrow Wilson was elected in the first place. The progressives split the Republican Party vote in two, leaving Wilson—the Democrat—with a 42 percent majority, and so he won on a fluke. La Follette represented Wisconsin, with a large German-American population. But his resistance to war fever seemed to come from his own resources; he held to it longer than politically necessary. He argued against it so strongly that his colleagues thought he was committing political suicide. Many couldn’t help but wonder: Is La Follette mad? According to some papers, he was a “Benedict Arnold.” He was a “Judas Iscariot,” said others. Students at the Massachusetts Institute of Technology burned him in effigy, and when La Follette left the Capitol after giving his spirited challenge to the war, another colleague handed him a rope.

But Fighting Bob was not easily bullied, not even after Senator Ollie James of Kentucky rushed at him with a gun in hand. Fortunately for the Wisconsin delegation, Senator Harry Lane of Oregon attacked James with a file and several other senators tackled him.

People were in no mood for question marks. The questions typically come later. In a bubble, or an empire, things that would seem preposterous and absurd under other circumstances—stocks at 200 times earnings, getting yourself killed for no apparent reason—become commonplace. Doubt and skepticism give way to fever.

“It is no time for criticism of the president, of the cabinet, of Congress.... It is time for one hundred percent Americanism,” said the sage Senator William Squire Kenyon of Iowa. He might have said that it was time to get drunk and dance naked around a fire. The leading politicians were ready for anything as long as it was hysterical. By this time, the superpatriots were out in force and cranked up to 150 percent Americanism. There were rumors that the Huns were stirring up an invasion from Mexico—with an army made up of Mexicans and “armed Negroes.” In an exhibition game, baseball legend Ty Cobb beat up another player, Buck Herzog, yelling “German!” People who opposed the war were being accused of cowardice.

In Tulsa, Oklahoma, a crowd hauled a Bulgarian immigrant out of a bar and lynched him.They mistook him for a German. All over the country, people declared they hated Germans, though none knew why. People changed their names to avoid sounding too Teutonic. The
New York Tribune
carried a phony story about a German factory that had been converted to turn corpses into soap. Nothing was too absurd.

Even after the war, the momentum of hatred took years to halt. The British continued their blockade of German ports and tightened it after the Armistice was declared.Thousands of Germans—especially children—starved to death. One British journalist visited a maternity hospital in Cologne. He found “rows of babies feverish from want of food, exhausted by privation to the point where their little limbs were like slender wands, their expressions hopeless, and their faces full of pain.” But so what, said Clemenceau. There were 20 million too many Germans anyway, reasoned the French premier.

Finally, at 4 PM on April 4, two days after the president’s appeal for war, Senator La Follette took the floor of the Senate.Why should Congress get behind the president, he wanted to know. Wilson had been wrong about other things, mightn’t he be wrong again?

What about the charge that Germany was sinking ships? Isn’t that what nations at war are supposed to do? England had put on a blockade of Germany. Germany had retaliated with its own blockade. American ships could respect the blockades or not. But they shouldn’t meekly consent to the English blockade of German ports while being indignant about Germany’s blockade of England.

La Follette spoke for 2 hours and 45 minutes. He ended with tears streaming down his face, for he knew that his words were not enough. He might have been explaining to a pack of hounds why they should let the rabbit go. According to Gilson Gardner, it was “the best speech we will . . . ever hear.” But blood was up all over America already. It didn’t matter what La Follette said. He was wasting his breath.

Much of what he said concerned who was at fault for the war. Wilson and the warmongers maintained it was Germany’s fault. Germany had invaded poor little Belgium, whose neutrality was guaranteed by all the major combatants—including Germany.Yet, Belgium was not really neutral at all; she had signed a secret agreement with Britain.

Germany had started the war, said the Wilsonians. But on the evidence, the Huns no more wanted war than anyone else. The Kaiser himself had tried to stop it.The war began amid a flurry of troop mobilizations, ultimatums, and declarations of war on all sides. Who was really guilty of having begun the war? Who was the aggressor?

Albert Einstein signed a declaration asserting that Germany was innocent. It had not broken international law by invading Belgium, said the text. Nor had Germany committed atrocities against the civilian populations of France and Belgium. In fact, the declaration went on to say that the future of European civilization depended on a German victory. And practically every professor at every German university agreed.

Even old enemies admitted, after the fact, that Germany was no more to blame than anyone else. Lloyd George, Britain’s former prime minister, began his memoirs in 1933 by stating that nobody wanted the Great War and nobody expected it. Instead, the nations of Europe merely “slithered over the brink.”
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Now, America was preparing to slither over the brink, too. Only La Follette and a handful of skeptics stood in her way.

The president claimed that Germany’s submarine blockade of England constituted a “war against all nations.” Why then, La Follette, wanted to know, was the United States the only one that objected to it? All of Scandinavia, Latin America, Spain—all the world’s nations were affected in exactly the same way. But not a single one of them even protested Germany’s decision. Certainly, none of them saw the action as a declaration of war.

And then, there was the claim that Germany was under the heel of a “Prussian autocracy.” So what, La Follette might have said. What business is it of ours how Germany governs herself? The Wisconsin senator guessed that the average German was more likely to back his government’s war effort than Americans were to back Wilson’s intervention in Germany’s war. And if Wilson was sure of the contrary, let him prove it. Put the matter to a referendum.

But America’s entry into what became World War I was never subjected to a popular vote. Democracy is all very well, as long as it takes you where you want to go. Besides, who would really trust the bumpkins to vote on something so important? Wilson knew what was best for everyone—American voters as well as Germans. With little more debate, the U.S. Congress voted to back the president. Only one member, apart perhaps from La Follette, seems to have had any idea what was at stake.William J. Stone, of Missouri, told his colleagues: “I won’t vote for this war because if we go into it, we will never again have this same old Republic.”
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The newspapers practically accused him of treason.

Stone was right; but that was the point of the war, to make the United States into an empire. Wilson was proposing to cross the Atlantic as Alexander had crossed the Hellespont and Caesar had crossed the Rubicon.

Every great public movement—and almost every empire—begins in deceit, develops into farce, and ends in disaster. Wilson’s war was no different. The idea of making the world safe for democracy was pure humbug. The Europeans had been fighting for two years. If it was a fight for democracy, it came as news to them. After the fighting was over, the French and English laughed at Wilson and ignored his Fourteen Points whenever they conflicted with their own interests. “Mr. Wilson bores me with his Fourteen Points,” said Clemenceau, puncturing the American’s bubble, “Why, God Almighty only has ten.”
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The American president was appalled and humiliated; he suffered a stroke and never recovered.

Was the world any safer for democracy at the end? Not on the evidence. Just the opposite; in the aftermath of the war, and Wilson’s inept settlement, arose democracy’s most aggressive and ruthless opponents—men who had ambitions to empire themselves and few scruples about how to achieve it.

Finally, 18 months after the United States entered the war, it was over. In much of Europe, the end is still recalled. At 11 AM on the 11th day of the 11th month, bells toll in France. In Britain, everything goes silent. The remembrance is for all the millions of young men who began putting on uniforms in August 1914. These wet, furry balls were plucked from towns all over Europe, put on trains, and sent toward the fighting. Back home, mothers, fathers, and bar owners unrolled maps so they could follow the progress of the men and boys they loved and trace, with their fingers, the glory and gravity of war.

It was a war unlike any other the world had seen. Aging generals looked to the lessons of the American War between the States or the Franco-Prussian War of 1870 for clues as to how the war might proceed. But there were no precedents for what was to happen. It was a new era in warfare.

People were already familiar with the promise of the machine age.They had seen it coming, developing, building for a long time. They had even changed the language they used to reflect this new understanding of how things worked. In his book,
Devil Take the Hindmost,
Edward Chancellor recalls how the railway investment mania had caused people to talk about “getting up steam” or “heading down the track” or “being on the right track.”
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All these new metaphors would have been mysteriously nonsensical prior to the Industrial Age. The new technology had changed the way people thought and the way they spoke.