Post-World War I Economy

• The United States entered World War I in 1917 and ended the war in 1918.
• The war resulted in a rapid demobilization of soldiers, who spent less time overseas than they had spent training and awaiting assignment in Europe.
• The nation practically "beat plowshares into swords" in 1917 and 1918 with the sudden conversion to a wartime economy.
• After the armistice, the nation returned to civilian production in an even shorter amount of time.
• Days after the war ended, the federal government canceled $4 billion worth of contracts for weapons and other military items.
• Although the government offered various payments to ensure that US companies did not lose money for these broken contracts, the sudden end of the war resulted in high levels of turnover within wartime industries.
• These jobs were lost just as soldiers were returning from Europe and seeking employment.
• Pent-up consumer demand led to the creation of new jobs creating consumer goods and within the construction industry.
• However, the war had also created high inflation, which reduced the buying power of consumers.
• Organized labor had often secured contracts that alleviated these forces during the war, but most of these modest wage gains were eliminated once workers were no longer in high demand.

Test your knowledge of the economic impact of World War I on the United States, including the rapid demobilization of soldiers, the sudden conversion to a wartime economy, and the subsequent challenges and changes in the post-war era.