This week (Jan. 9) in 1917, as World War I raged in Europe, one of the chief belligerents in that war, Germany, made a fateful miscalculation that would ensure it lost the war. Germany decided to renew its U-boat (submarine) attacks against U.S. shipping.
This reversed a decision made at the start of the war by Germany and its main enemy, Great Britain. At that time, both countries decided to refrain from attacking neutral shipping, even shipping intended for the enemy, because they feared such attacks would alienate the neutrals, especially the United States.
But things were different in 1917. After three years of bloody stalemate in the trenches on the Western front, Germany and Britain were both looking for a new strategy to win the war. The Germans re‑discovered the U‑boat, which they thought could destroy 600 thousand tons of neutral shipping a month and knock Great Britain — an island that depended on imports to survive — out of the war in six months.
The Germans also re-evaluated their fear of U.S. reprisals, wondering why they were denying themselves a war-winner — the U-boat — in deference to a country that was an ocean away and had no army, air force or navy to speak of.
It was a good question. In 1917, the U.S. military was pathetic for the simple reason that it was unnecessary. Protected by oceans to the east and west, one friendly nation to the north and a weak one to the south, America didn’t need a large armed force. And given its pervasive isolationism — President Woodrow Wilson had specifically campaigned on the promise to keep America out of World War I — America didn’t want a large armed force.
But in deciding to renew their U-boat attacks, and almost certainly force the U.S. to enter the war, the Germans made two mistakes. First, they were unaware of the extent of America’s industrial potential, and thus totally underestimated the country’s ability to gear up for war.
Second, the Germans hadn’t counted on the U.S. greenback dollar. This was significant because, unbeknownst to Germany, in 1917 Britain was near bankruptcy. Indeed, it is arguable (although by no means certain) that the Germans would not have needed U-boats to stop neutral shipping from reaching Britain because Britain’s creditors, by refusing to lend any more money, would have done the job more effectively!
Instead, upon entering the war in retaliation for Germany’s resumed U-boat attacks, the U.S. lent Britain and its main ally France billions of dollars, allowing them to continue the war. This, plus the combination of American soldiers and military equipment that began pouring into European ports in 1917, spelled the beginning of the end for the German Kaiser and his crew.