The passenger liner killed 1198 people 128 of whom were American citizens. The U.S "yellow press" made sure that the American citizens were left with a brutal image of Germany and it was only by luck of judgement that Wilson avoided going to war with Germany then. The Germans cause to attack the liner was that it was secretly carrying weapons therefore it was a reasonable target for the Germans to attack, however, their unrestricted U-boat warfare in 1915 (ended after U.S declare it is an "infringement of the freedom of the seas" 1916) was going to cost them dearly when in 1917 they restarted this campaign. The unrestricted U-boat campaign was a German declaration that said that allied ships would be sunk without warning, to America this seemed barbaric and directly violated the Monroe Doctrine. However, Wilson decided to try solving the problems the sinking of the Lusitania had caused diplomatically by holding the Germans strictly accountable whilst making it clear that if the Germans continued to endanger American lives, the U.S would be forced to act. The Germans were anxious not to alienate America and not bring them into the war; therefore they abandoned the U-boat campaign. "Wilson contented himself with securing German assurances that such atrocities would never be repeated" (Paul Johnson). .
Wilson's aspiration for peace was evident; he proposed a peace conference to Edward Grey, the British Foreign Secretary and implied that if the allies accepted to partake in peace talks whilst the Germans would not then the U.S would be more inclined to join the war on the side of the Allies. However, neither the Allies nor the Germans seriously believed that America would join the war, therefore it came to nothing.
It was at this point Wilson realised that even if America did come to the war then America had to be better prepared. Wilson started his campaign for "preparedness". He asked congress for an increased army and navy so that if in the event of war America would be prepared.