The administration of President Woodrow Wilson immediately faced important questions about American interests in the months following the outbreak of the major European war in August 1914. The United States was already a significant economic power in global terms, although it owed more money to foreign creditors than it was owed, and largely was a big economic power because of its sizable domestic market - foreign trade, while significant, played a much lesser role in the Gross National Product than in Britain, for example. However, the American economy was in recession, and the business opportunities offered by the war tempted American manufacturers and exporters. One of the most seriously affected regions of the country was the South, a key element in the coalition that elected Wilson in 1912, and of the Democratic party at this time generally. Unable to export their cotton to Europe, farmers faced ruin.
For William Jennings Bryan, the secretary of state, the sinews of modern war were provided by finance. Cut off the supply of money to belligerents, and the war might stop. But while the U.S. government was willing to cut off the public finance of loans or credits to European states, the free enterprise ideology that was one of the Gospels of Americanism at this time (and remains so) would not allow the government to halt initiatives by private financial institutions. Although Bryan exhorted American banks to refuse to lend to the warring nations, some saw a useful opportunity and took it. By October 1914, the policy of exhortation had been set aside by Wilson and the Counselor at the State Department, the Anglophile Robert Lansing, one of America's leading experts in international law.
A month after the outbreak of war, and a month before the abandonment of the exhortation policy, the Wilson administration chose not to impose an arms embargo, allowing American manufacturers to sell weapons to anyone who could afford to buy them and ship them across the Atlantic. Given that the British had imposed a fairly tight blockade on Germany, this meant that only the French and British were able to take advantage of the American decision.
The British blockade of Germany created yet another problem for Bryan and the administration, in that they followed, but not quite to the letter, an agreement concerning shipping in time of war. The British amended the definition of contraband that could be seized to suit themselves, expanding it slightly. Wilson, under Lansing's influence, agreed to go along with the British interpretation, in spite of the existence of an internationally recognized agreement that the British had helped negotiate, although one that had not been ratified by the British government. One major reason for this was the relatively small size of the American merchant fleet. American shipping was unlikely to be affected significantly by the British interpretation.
Finally, at the outbreak of war, the British began arming their merchant ships. Under international agreements, warships were not allowed to remain in a neutral port for more than 24 hours. But the British insisted that these armed vessels were not warships, because they were only armed for self-defence, and would be hopelessly outclassed by any but the weakest naval vessel. In practical terms, the Germans did not have the naval force on the high seas to make the matter significant. A few cruisers were based in the Pacific, and another in German East Africa. At this stage, British ships ruled the waves, especially the Atlantic between Europe and America. Lansing again pointed out the practical effect of the British policy, and set aside German insistence on the principle.
In each case here, the American Way of War, at least in the diplomatic dimension, is shown. American public policy is traditionally built out of practical responses to immediate problems, tending to favour the dominant interest group on the issue, rather than implementing an idealistic philosophy. Bryan represented a genuine American enthusiasm, at this time another of the Gospels of Americanism, for pacifist ideals. However, a search for practical responses to problems set aside the ideals. The Wilson administration could have imposed an arms and loans ban on the belligerents, insisted on the sanctity of international agreements, and required that the rules of war be implemented to the letter. They did not, and each step taken antagonized one side in the European conflict. When the next major crisis came, the Germans were hardly surprised by the American response, but the consequences fatally undermined the strong anti-war movement in the United States.