America cuts off loans to belligerents in 1914

[Germaniac]

Now granted this comes from wikipedia, though sourced [1], apparently William Jennings Bryan convinced President Wilson that all loans to belligerent nations should be blocked. However Wilson changed his mind at the French' insistence.

If the united States made it illegal to process loans, even just for war goods, how would this effect the war. How long could France and Britain hold on before going broke? Would this greatly effect the american economy (especially coming out of a recession)? How would this effect the american banking industry's growth during and in the years after the war?


[1]Horn, Martin (Spring 2000). "A Private Bank at War: J.P. Morgan &Co. and France, 1914–1918". Business History Review.

 

[LordKalvert]

France and Britain probably had the financial resources to finance their war purchases until about 1916. After that, they would be defeated rather quickly

Germany and Austria had very limited ability to import anything especially from America. They aren't really going to be affected at all

 

[Montanian]

America cutting off war production sales in 1914 would have affected the million plus infantry rifles ordered by the British, Russians, and Belgian Armies (but not machine guns, artillery, radios, field telephones, combat aircraft (oddly)) along with millions of horses, some trucks and staff cars, DuPont explosives, barbed wire, and small arms ammunition.

Helpful certainly but not as essential the big critical exports of food, coal, gasoline, lumber, steel, copper, brass, wool and cotton clothing/material, leather boots, canvas tenting, canned food, etc. along with the cash to pay troops, buy inputs, and paper over the huge holes in tax revenues/economic activity of the war. I think anything not obviously handed to a soldier was being shipped as soon as payment cleared so the question of definition and enforcement is significant like any boycott or smuggling. So a rigid neutrality on all shipments to belligerents would have a substantial effect in 1915-16.

Assuming U.S. shipping and capital turned it's attention to available markets other than war zones, it would be a boon for Latin America, Argentina, Brazil, Venezuela, Chile, and Colombia especially (railroad expansions, new mines and smelters/refining, oil fields, rubber and coffee plantations, Argentine ranching, banking, telephone systems and electrical grids/generation, etc. would be the beneficiary assuming Mexico remained in the 1910-1923 civil war/chaos/revolutions OTL, otherwise Mexico would boom.

Coming out of the much shorter war, Britain and France would have been considerably more financially exhausted and less able to press "reparations" on the Germans, perhaps avoiding their 1920's Depression. The U.S. wouldn't have the fake prosperity of hundreds of millions of dollars of filled orders that would never be fully or substantially repaid but instead not squandered it's accumulated capital to nearly the same extent, helping it whether the 1930's far better and rely less on debt in the 1920's.

It would have been the smart move, but the U.S. foreign policy rarely considers logistics or uses their disruption effectively.