The economic and social progress achieved in early 20th-century Europe created a general mood of optimism. Materialism was in the ascendant and industry strove to achieve ever higher turnover, sales and profits. The newspapers were full of jubilant accounts of booming coal and steel production, ever bigger ships, accelerating population growth and expanding armies. But the new technologies born of the industrial revolution were also being used to produce new and improved weapon systems. On 28 July 1914, when the assassination of the heir to the Austrian throne, Franz Ferdinand, and his wife in Sarajevo prompted Germany's ally Austria to declare war on Serbia, nobody had any inkling of the eventual consequences. This first all-out war in world history, with its combination of antiquated military strategies and up-to-the-minute weaponry, was to prove disastrous to those who served in it. The 'Great War', as it was known at the time, cost the lives of 10 million men and the limbs of 20 million more. Within four years it cut a broad swathe through the male population of Britain, Germany, France and Russia.

At the start of the war, the Dutch government reaffirmed the Netherlands' traditional neutrality, but announced that it would mobilise the country if Germany failed to keep its commitments. Germany's invasion of Belgium (which was also neutral) in August 1914 caused turmoil in the Netherlands. Within a few days, the Dutch economy went into melt-down. Goods were hoarded, money withdrawn from the banks, industrial production reduced and workers dismissed on a massive scale. The country also had to cope with thousands of Belgian refugees. Despite the panic, the government managed to restore calm. The Minister of Agriculture, Trade and Industry, Willem Treub, was especially successful in using economic measures to halt the general collapse in confidence. The government issued a statement in parliament appealing for political differences to be forgotten for the duration and even P.J. Troelstra's Social Democratic Labour Party (SDAP) agreed. .

The Netherlands succeeded in preserving its neutrality because of the associated benefits to the belligerent nations. Britain was glad that German troops were denied access to the North Sea coast and Germany was happy to be able to transport goods via the Netherlands. Even so, both countries continued throughout the war to put pressure on the Netherlands to give up its neutrality. Dutch diplomats were kept busy negotiating with the aim of keeping the Netherlands out of the war.

In 1917, despite the proximity of hostilities, the government succeeded in obtaining parliamentary approval for a revision of the constitution. This satisfied major demands of both the left and the right. The left gained universal male suffrage and the right financial equal treatment of denominational and non-denominational schools. Other important provisions concerned the introduction of compulsory voting and proportional representation, putting an end to the system of constituency voting which had often necessitated many further ballots.

The new electoral system produced a minor landslide in the next year's general election. The main losers were the liberals and the winners the confessional parties. The SDAP won some seats but was disappointed at the proletariat's failure to achieve the expected socialist revolution via the ballot box. The main victor was the Roman Catholic State Party which, together with the other confessional parties, was to maintain its grip on the Dutch political scene for most of the next half century.