III.

Economic and Industrial Resources

Industrial and economic resources played an important role in World War I. Military success was critically dependent on a country’s ability to produce a continuous supply of goods for their armies. German industrial resources were so great that Germany was able to survive the British naval blockade and meet the demands of four years of war, while giving some help to Austria-Hungary. British industry, although capable and versatile, had begun to lag in output and in modernization. Britain came to depend heavily on U.S. production. Throughout the war, Germany occupied French territory that contained important industrial and mineral resources, so France also depended on U.S. supplies. Russian industry was incapable of dealing with the needs of the Russian armies. In addition, since the Ottoman Empire controlled the Dardanelles Strait, Russia was cut off from Allied supplies via the Mediterranean Sea and could not easily be supplied from its Arctic or Pacific ports.

During the war, Britain and France were able to harness the economic resources not only of their own vast colonial empires, such as India and Indochina, but also of the United States. This ability gave them a great advantage. The Central Powers were cut off from their prewar markets and sources of food and raw materials. Although Germany gained access to the vast economic resources of the western part of the former Russian Empire in the spring of 1918, it was too late in the war to affect the outcome.

The Allies also enjoyed a critical advantage in being able to obtain loans from American investment banks. The Allies used the loans to purchase oil, wheat, steel, and other critical products. When the United States entered the war, the U.S. Treasury Department took over the financing of loans to the Allied Powers to cover their supply purchases in the United States. The combined economic resources of the United States and the British Empire played a significant role in the Allied victory.