Costs of the War
Grace McGarel P.9 May 22,2014

       During World War I, many countries faced economic issues.  The blockade of Germany was one issue, when Germany used underwater boats, called U-boats, to sink vessels flying the flags of neutral countries.  They then apologized to the United States and promised not to attack passenger and merchant ships without warning them first.  After Germany made the promise, the U.S. manufacturers increased their trade with the Allies, and trade in 1916 went up to $3.2 billion.  Military transportation was an issue as well, because merchant ships were being intercepted and they could not receive goods.  The Allies had some methods they used to avoid large costs.  The Allies had better access to global supplies and had larger and more versatile economies.  Everyone expected a short war, and the Allies had advantages because no one had prepared for a long war.

       There were many postwar costs that countries had to pay.  There were war debts to be paid, such as loans that needed to be paid off from country to country.  Britain and many other countries had their financial holdings lose value.  Countries also had to give reparations to other countries for the damage they had caused.  Germany had to give reparations to other countries, and had to pay 19 billion gold marks between 1919 and 1932.  They took out 27 billion gold marks in loans.  The U.S. and Canada made money from Germany's reparations.  Reparations were designed to restore damage to citizen economies.

       The Allies had a lot of wealth.  They had more money available to spend on the war than they needed.  The Allies were wealthier than Germany.  Germany spent $45 billion on the war.  The Allies spent $147, and the Central Powers only spent $61 billion.  The Allies used economic warfare to damage Germany's economy.  The British blockade  was effective.  Britain paid the war costs of many of their Allies until they ran out of money.  Germany lost money as well because of economic warfare.

       Interesting facts:  The total cost of World War I was $186.3 billion.  The Allies war cost was over 2 times as much as the Central Powers.  Japan's cost of the war was only $40,000,000 while Germany had to pay $37,775,000,000.