Question

What was a result of U.S. trade with Germany in 1914?

Answer 1

Germany was the first belligerent country to take steps to control the purchase and distribution of raw materials.[15] In August 1914, Walther Rathenau (1867-1922), administrator of the electric company AEG (Allgemeine Elektrizitäts-Gesellschaft), warned the army that the country had no supply program and would shortly experience a lack of munitions. The War Raw Materials Department (Kriegsrohstoffabteilung or KRA) was set up few days later. This department was led by Rathenau himself, who chose his colleagues as the industrial and financial leaders. They were in charge of controlling the requisitioning and allocating of raw materials needed by the armament industry. This creation was the first step toward total mobilisation for war.

To make sure raw materials were delivered to the firms that needed them, the KRA created twenty-five War Raw Materials Corporations (Kriegsrohstoffgesellschaften). Each dealt with specific products such as chemicals, metals, wool, leather, etc., which they had to buy, store, and distribute. They corporations represented the private consumers and thus the industrial interests. The companies fought for the property and control of each of these corporations, since they gave their shareholders advantages and lower prices thanks to state interventions.

The KRA was under the Ministry of War's authority and the power of the army kept increasing throughout the war. In August 1916, the Hindenburg Programme demanded that all available resources be used to increase the armament output. All issues related to the war economy were centralised in the War Office. While preparing the Hindenburg Programme, the War Office had not focused on transports or coal supplies. Therefore, by the end of 1916 the country lacked fuel and trains. In March 1917, a coal commissar was given the charge of allocating coal to every consumer. His powers were quite expansive: although he could not always make the decision to close a factory, he could refuse to send it the coal it needed. In the last year of the war, it appeared that the coal resources would not be sufficient to fulfil all the armament needs nor the civilian and railways ones. The War Office made the decision to prioritize the military requirements.[16] As a result, the Hindenburg Programme and the coal commissar let no raw materials nor manufactured goods go to the civil population, whose situation worsened until the end of the war.