Part 2 Chapter 10 War Summary and Analysis

In 1914 World War I begins, as Austria-Hungary declares war on Serbia. This results in a panic on Wall Street when all of the European markets close. On July 31, 1914 Wall Street responds in the usual way to the crisis and meets at the House of Morgan. The decision is made to keep the stock exchange closed. The exchange remains closed until December. Wilson announces American neutrality in the war. This doesn't sit well with the House of Morgan which is pro-Ally. They are not allowed to engage in financial dealings with the Allies for two months. The change in policy comes about as exports to Europe pull the U.S. out of a recession. Eventually the House of Morgan becomes a purchasing agent for the allies from which it earns $30 million in fees during the war.

Jack is...