I took a class on US military history around two years ago so my answer is mostly coming from what I learned in that class. Unfortunately, its multiple posts.

Hopefully this post will answer your question well enough. I will admit that it is probably pretty extraneous and overly long, but I think that there's a more cultural reason for why the US was so unprepared in the leadup to the First World War that goes back to the country's founding. This article by Michael Shurkin that I mention in this post delves into the more immediate reasons for unpreparedness, though.

----------------------------------------------------------------------

The answer to this question is a mix of politics, culture, and military organization whose roots stretches all the way back to before the American Revolution. Among the numerous reasons for why the colonials revolted against and, later, declared independence from the British was the placement of British soldiers, the famed "Redcoats", as a sort of military occupying force in the city of Boston. Aside from the Boston Massacre and the acts that caused the Boston Tea Party, one of the biggest complaints the local Bostonians had to the arrival of the Redcoats was that they were forced to house these soldiers against their will. Prior to the 1770s, the British Parliament had passed the Quartering Act during the French and Indian War. It mandated that the colonials had to pay for the services of the soldiers who were defending the colonies from the French and their Native American allies. This act proved unpopular so the British began occupying, in the view of the more rebellious colonials, the major cities in order to ensure compliance with the new measures. Following the passage of the Quartering Act of 1774, which allowed for the forced quartering of British soldiers that I mentioned earlier, tensions skyrocketed and we all know where that eventually led to.

The reason why I mention these ancient events is to demonstrate the idea that from the very beginning, the American experience has been, or at least was prior to the Cold War, rooted in a distrust of standing armies. Samuel Adams, one of the masterminds behind the Boston Tea Party and, of course, a Founding Father, wrote in 1768 that "even when there is a necessity of the military power, within a land, a wise and prudent people will always have a watchful and jealous eye over it." Similarly, Eldridge Gerry, who was a delegate at the Constitutional Convention, wrote that "[s]tanding armies in time of peace are inconsistent with the principles of republican Governments, dangerous to the liberties of a free people, and generally converted into destructive engines for establishing despotism." This sort of primal distrust is also featured directly in the Constitution. The Third Amendment explicitly forbids the nonconsensual quartering of soldiers by American citizens.

Aside from the political reasons for this distrust, there were also cultural reasons. As exemplified by the Second Amendment, for the most part the colonials did not rely on the British army to protect them from the Native Americans who occupied the lands that they were colonizing. Due to how vast and unexplored the American continent was for the colonials, the job of protection was either the responsibility of the individual and the family patriarch or local militias. After the Revolutionary War, this culture of individualism and self-reliance continued to entrench itself into American society. This was especially true of the settlers who colonized the land west of the Appalachian Mountains.

The unpreparedness of the army that you are asking about was a very regular state of affairs throughout the 18th and 19th centuries. In the realm of modern (pre-aerial) defense policy, there are usually two organizations competing for resources: the army and the navy. In France, for example, the army was usually the branch of the military that received the most resources. This makes sense as most of France's rivals and enemies can reach the country simply by marching overland. In Britain, on the other hand, the branch that usually won the war for resources was the navy. This makes sense, as well. By the 18th century, the British had defeated any and all threats on the island. Scotland had been absorbed and Ireland had been subjugated. Therefore, as an island nation, it is the navy that is the first line of defense. Among the major European powers, the British would consistently have the smallest army. This state of affairs would continue until the era of the World Wars.

Similar to the British, the war for the very limited resources that the federal government had at its disposal was usually won by the navy. Now, if you take a look at a map it becomes obvious that the United States is not an island nation. North America is vast, the American supercontinent is even larger, and the United States does not rule all of it. In terms of how Americans viewed themselves and their place in the world, though, it may as well have been an island. More than the army or even the navy, the United States' greatest defensive assets at the time, and arguably still to this day, have always been the two massive oceans that separate it from Europe and Asia. While it is true that the Spanish, French, and British empires all bordered the fledgling new country, the Napoleonic Wars and the subsequent wars for independence within the Spanish colonies effectively sidelined these world powers and prevented them from interfering too much in the establishment of the United States as a major regional power.

Going back to the Army, though, the distrust in standing armies and governmental authority that I mentioned earlier would see the establishment of state militias. Their presence essentially acted as a third pole for military resources and, even more importantly, political influence. These state militias grew out of the colonial militias that had protected the colonials from attacks by the French, the Spanish, and the numerous Native American tribes and confederacies. They had their own hierarchies, traditions, and tactics. Influential politicians and military leaders alike served in these militias. Now, you may be asking "why?" Wouldn't people with ambition gain more influence by serving in the Navy or, hell, even the Army? To some degree, this is true. Many of our most famous leaders during the so-called "Antebellum" period, both political and military, had careers, distinguished or otherwise, in the Army. Of course, there is George Washington, the only President to ever lead soldiers into battle while occupying the office. Other famous examples include Andrew Jackson, William Henry Harrison, Robert E. Lee, George B. McClellan, and Ulysses S. Grant. By and large, though, if one wanted to achieve martial prominence or protect their fellow citizens from Indian attack then joining a state militia was the way to go. Abraham Lincoln, for example, served in the Illinois state militia as a Captain during the Black Hawk War in 1832, He had briefly suspended his campaign for election to the Illinois State Legislature in order to do so.

The Army during this time period was not the primary organ of defense. As demonstrated above, the Navy and the state militias were largely responsible for that job. In terms of national culture, the Army was looked down on both culturally and politically. Especially in the years prior to the Civil War, the Army was home to the dregs of society. According to Clayton R. Newell’s book, The Regular Army Before the Civil War: 1845-1860, the Army often found itself in possession of "young boys and men seeking adventure, men escaping problems at home, and European immigrants." Instead, during the Antebellum period, the Army's main responsibility was exploration, surveying various areas of the United States, and maintaining the network of forts that dotted the American coastline and protected settlers in the frontier from Native American raids.