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The House of Morgan was not merely an Allied fiscal agent. Its partners, notably J. P. Morgan himself, the late Henry P. Davison and Thomas W. Lamont believed, long before the public did, that a defeat for the Allies would have been defeat for the U. S. (Said Partner Davison later: "Some of us in America realized that this was our war from the start") and bent their energies to help. When Allied purchasing agents in the U. S. began fruitlessly bidding against one another, the Morgans became central purchasing agent to the Allies, and Morgan Partner Edward R. Stettinius (whose Son Edward was to become chairman of U. S. Steel 21 years later) bought $3,000,000,000 worth of U. S. goods for shipment to England and France.
A quarter of a century ago $3,000,000,000 was three times the U. S. national debt. The effect of such huge purchases was stupendous. Of the whole period, 1916 was the bonanza high point; common stocks of sixty-eight major U. S. industrials paid a total of $724,900,000 to investors during that year. Du Pont, Hercules Powder Co., Remington Arms, Savage, and Winchester Arms all got big Allied orders for munitions. U. S. Steel converted a deficit of $1,700,000 before common dividends in 1914 to a net for common of $50,600,000 in 1915 and $246,300,000 in 1916. Copper went to 28¢ a pound in 1916 (it was stabilized in the fall of 1917 at 23¢). The automobile industry which in 1913 put out 461,500 passenger cars in 1916 built 1,525,578.
The U. S. chemical industry developed rapidly. With German dyestuffs cut off by the British blockade, hundreds of small chemical companies sprang to life after 1914. New capital poured in—$16,838,000 in 1914, $65,565,000 in 1915, $99,244,000 in 1916, $146,160,000 in 1917.
The chemical industry got a further boost when the U. S. entered the War: German patents were confiscated and turned over to U. S. firms. But after the U. S. entered the War, prices for many commodities were fixed below their neutrality highs and although war profits were bigger on bigger volume, neutrality's profits were not eaten into by high war taxes.
Dollars & Men. Had the U. S. not entered the War quite a number of U. S. citizens might have made far more money. On the $500,000,000 British and French loan of October 1915 a group of American bankers headed by the House of Morgan made $9,000,000 on the spread between the purchase price (96) and the selling price (98). Of this sum the Morgan firm received $66,000. From its 1% commission as purchasing agent for England and France Morgan & Co. got $30,000,000. All that ended when the U. S. entered the War, when Davison became chairman of the Red Cross War Council, and Stettinius became second assistant Secretary of War, when the U. S. Treasury took over the job of Allied banker.
During the War period, as during neutrality, the Guggenheims, William Rockefeller (brother of John D.) and John D. Ryan, heavy owners of copper stocks, made big profits. While neutrality lasted so did speculators such as Jesse L. Livermore and Bernard Baruch. But speculative profits in commodities were reduced when the U. S. Government took control of prices as a war measure. Speculator Baruch himself headed the War Industries Board which fixed the prices.