<P> German submarines torpedoed ships without warning, causing sailors and passengers to drown . Berlin explained that submarines were so vulnerable that they dared not surface near merchant ships that might be carrying guns and which were too small to rescue submarine crews . Britain armed most of its merchant ships with medium calibre guns that could sink a submarine, making above - water attacks too risky . In February 1915, the United States warned Germany about misuse of submarines . On April 22, the German Imperial Embassy warned U.S. citizens against boarding vessels to Britain, which would have to face German attack . On May 7, Germany torpedoed the British passenger liner RMS Lusitania, sinking her . This act of aggression caused the loss of 1,198 civilian lives, including 128 Americans . The sinking of a large, unarmed passenger ship, combined with the previous stories of atrocities in Belgium, shocked Americans and turned public opinion hostile to Germany, although not yet to the point of war . Wilson issued a warning to Germany that it would face "strict accountability" if it sank more neutral U.S. passenger ships . Berlin acquiesced, ordering its submarines to avoid passenger ships . </P> <P> By January 1917, however, Field Marshal Paul von Hindenburg and General Erich Ludendorff decided that an unrestricted submarine blockade was the only way to achieve a decisive victory . They demanded that Kaiser Wilhelm order unrestricted submarine warfare be resumed . Germany knew this decision meant war with the United States, but they gambled that they could win before America's potential strength could be mobilized . However, they overestimated how many ships they could sink and thus the extent Britain would be weakened . Finally, they did not foresee that convoys could and would be used to defeat their efforts . They believed that the United States was so weak militarily that it could not be a factor on the Western Front for more than a year . The civilian government in Berlin objected, but the Kaiser sided with his military . </P> <P> The beginning of war in Europe coincided with the end of the Recession of 1913--1914 in America . Exports to belligerent nations rose rapidly over the first four years of the War from $824.8 million in 1913 to $2.25 billion in 1917 . Loans from American financial institutions to the Allied nations in Europe also increased dramatically over the same period . Economic activity towards the end of this period boomed as government resources aided the production of the private sector . Between 1914 and 1917, industrial production increased 32% and GNP increased by almost 20% . The improvements to industrial production in the United States outlasted the war . The capital build - up that had allowed American companies to supply belligerents and the American army resulted in a greater long - run rate of production even after the war had ended in 1918 . </P> <P> In 1913, J.P. Morgan, Jr. took over the House of Morgan, an American - based investment bank consisting of separate banking operations in New York, London, and Paris, after the death of his father, J. Pierpont Morgan . The House of Morgan offered assistance in the wartime financing of Britain and France from the earliest stages of the war in 1914 through America's entrance in 1917 . J.P. Morgan & Co., the House of Morgan's bank in New York, was designated as the primary financial agent to the British government in 1914 after successful lobbying by the British ambassador, Sir Cecil Spring Rice . The same bank would later take a similar role in France and would offer extensive financial assistance to both warring nations . J.P. Morgan &Co . became the primary issuer of loans to the French government by raising money from American investors . Morgan, Harjes, the House of Morgan's French affiliated bank, controlled the majority of the wartime financial dealings between the House of Morgan and the French government after primary issuances of debt in American markets . Relations between the House of Morgan and the French government became tense as the war raged on with no end in sight . France's ability to borrow from other sources diminished, leading to greater lending rates and a depressing of the value of the franc . After the war, in 1918, J.P. Morgan & Co. continued to aid the French government financially through monetary stabilization and debt relief . </P>

World war 1 brought increased immigration to the united states from which country