An Uncertain Peace and the Democratic States

Chapter 26

The Futile Search for Stability: Europe between the Wars 1919-1939

Why the fragility??• League of Nations was not the strong body Wilson had

imagined• The U.S. and Great Britain did not honor their alliance with

France• Russia was now hostile• France allied with Poland and little Entente

(Czechoslovakia, Romania, and Yugoslavia), but they were weak– Yugoslavia was a new nation made up of Serbs, Croats,

and Slovenes• Germany felt this was a “dictated peace” and was angered

by article 231 the war guilt clause

The French Policy of Coercion 1919-1924

• Wanted strict enforcement of Treaty of Versailles– Reparations of 132 billion marks ($33 bill)– Wanted 2.5 billion gold marks a year– 1st payment in 1921 with threat from Allies to occupy Ruhr

valley– 2nd year Germany says– France moves into Ruhr to use mines and factories

• French Occupation– German use passive resistance; print more money– Communists and Nazis try to take over– France is pressured to withdraw by U.S. and Great Britain

The Hopeful Years 1924 - 1929• Dawes Plan – August of 1924

– Designed by American banker Robert Dawes– Reduce reparations and loan $200 mill to Germany

• New Efforts at Diplomacy– Treaty of Locarno in 1925

• Gustav Stresemann and Aristide Briand (France) make new borders between Germany and France; Germany and Belgium (not Poland) “Peace at Last”

– Germany joins League of Nations– Kellog – Briand pact

• U.S. secretary of state Frank Kellog and Briand arrange; 63 nations “renounce war as an instrument…” but there is no way to punish violators

Fragile Peace

• New governments– France and Great Britain more agreeable – Germany led by Gustav Stresemann who

wanted to carry out provisions of Treaty of Versailles

• Underlying Problems– Treaty of Locarno had no real substance only

spirit– Germany has no military– No one agreed to disarm– Geneva conference in 1932 was pointless– West was Ok with Soviet Russia

The Great Depression looms• Post War

– Most want to return to free-market economies– Cartels and unions that grew during the war are

now too strong for there to be no government involvement

– Free trade is hindered by:• Protectionism• Trade barriers• Reparations• War debts

– 1924 – 1929 we have a fragile prosperity

The Great Depression• Downturn in Domestic Economies

– Overproduction of agriculture leads to dropping prices

– Tariffs hurt more than they help– Coal industry declines due to increase in oil

and hydroelectric power– U.S. withdraws investment (1st to put in our

market)• U.S. stock market crash

– More U.S. withdrawal– Vienna’s #1 bank crash– Trade slowed with industries cutting back on

production• Unemployment begins to rise• Why???? Is this the “Great”

Depression????– ¼ of workers in Great Britain are

unemployed– 40% of German workers are unemployed– 1000s are homeless

The Great Depression (1929-1941)

The Great Depression (1929-1941)

The Great Depression (1929-1941)

Unemployment Figures

The Great Depression (1929-1941)

Unemployment Figures

The Great Depression’s impact

• Social Repercussions– Women could sometimes get low paying jobs as

servants, maids, nannies, etc…– Men had a harder time finding any work– Many of the youth turned to gangs

• Governments– Classic way to deal with depression was to lower

wages and raise tariffs (but that made this one even worse)

– Government became more involved in the economy– Interest in alternatives like Marxism, communism and

dictators grew

The German MarkThe German Mark

The Democratic States

• More nations were democratic

• Most had universal male suffrage

• Several (mostly the non-Catholic dominated) allowed women to vote as well

Great Britain• Post War Decline

– Lost industrial markets to U.S. and Japan– Staple industries declined: coal, steel, and

textiles– Rise of unemployment

• John Maynard Keynes– Cambridge economist– General Theory of Employment, Interest,

and Money– British politicians ignored his advice– Depressions should not be allowed to work

themselves out– Deficit spending is needed to increase

demand

Great Britain’s Government• Labour

– Liberal coalition with Ramsey MacDonald as Prime Minister– Reject any extremes– Only lasted 10 months (conservatives thought too communist)

• Conservatives– Stanley Baldwin as Prime Minister– Time of superficial prosperity

• Exports did not equal pre-war • Unemployment at 10%• Glut of coal caused low wages which caused strikes

• Labour– 1929 until fall in 1931

• National Government– Coalition of all three parties– Balanced budget and tariffs– Unemployment went from 3 mill to 1.6

France• Impact of WWI

– The #1 power on the continent– Focus on need to rebuild– National Bloc led by Raymond Poincare– Wanted to use Germany’s reparations to rebuild– Invaded Ruhr when these did not continue– Raised taxes and voted out

• Cartel of the Left– Formed of Radicals and Soviets– Platform: anti-militarism, anit-clericism & importance

of education– Radicals were actually Democrats and small property

owners– Socialist were only nominally Marxist– They cooperated to win elections– Differences in economic and financial issues led to

stalemate• Raymond Poincare

– Returned and stabilized

The Great Depression Hits France in 1932

• In a nineteen month period they go through 6 cabinets• Fascist are marching in the streets• Fear of them results in rioting in 1934• Popular Front – June 1936

– Coalition of Communist, Socialists, & Radicals– Lein Blum (socialist) was P.M.– French New Deal

• Collective bargaining• 40 hour work week• 2 week paid vacation• Minimum wage

– Didn’t solve all the problems– ? Lack of confidence

The Scandinavian Example• Socialist:

– Sweden, Denmark, Norway, and Finland

– Encouraged rural and industrial cooperative enterprises

– The were privately owned• Social Democratic: expand social

services– Increase in old age pensions and

unemployment insurance– New:

• Subsidized housing, free prenatal care, maternity allowances, and annual paid vacations

– Government:• High taxes and large bureaucracies• All industries prospered• Rise in wages

The United States (worse than any other except Germany)

• Industrial production down by 50%• 15 million unemployed• New Deal

– FDIC, CCC, Federal Emergency Relief Administration– Recovery was still very slow

• Second New Deal– WPA and SSA– National Labor Relations Act = rapid growth of unions

• Only WWII solved