Global Depression Between the Wars

Destruction

• WWI destroyed homes, factories, and roads from France to Russia– Many people

became refugees

– Reconstruction was slow & expensive

WWI caused governments to collapse

• Russia became the communist Soviet Union

• Italy became fascist• Germany, Austria-Hungary

and Ottomans lost empires• Great Britain & France

developed coalition governments– Ex. France’s government

changed 40 times from 1919-1939

• Many colonial lands freed

WWI drained Europe’s resources

• France’s coal/iron industries flooded by Germany

WWI left every major European nation bankrupt

• Germany, Great Britain, and France had most debt

• Only 2 nations remained creditor nations: U.S. and Japan– Why? Both expanded trade to supply

the Allies & WWI wasn’t fought on their land

• European nations could not repay loans to US (over $10 billion owed) so they tried to raise revenue– Ex. Germany printed more money– Ex. Great Britain created protective

tariffs and offered low interest loans to restart industry

• Inflation (1921: 64 marks = $1; 1923: 4.2 trillion marks = $1)

• Big Four nations went on gold standard to raise value

WWI left the world skeptical & disillusioned

• Modern warfare caused many to lose enthusiasm and add doubt

• France build Maginot Line to prevent German invasion

• 65 million served in WWI with 9 million battle deaths and 38 million casualities (dead and wounded)- 3x population of NC- change in your notes!

• US experienced Roaring Twenties (escapism) and Red Scare (fear of communism)- tried to choose isolation but center of power had shifted from Europe to the US

Peace Attempts

• League of Nations (1920)– What? Peacekeeping

organization of 40 nations (US did not join- although it was Wilson’s idea)

– Purpose? Aimed to settle conflicts without violence and to protect smaller nations against attack by stronger ones

– Why failed? No power to stop attacks or prevent war (no military to back up claims)

Peace Attempts

• Locarno Treaties (1925)– What? Agreement signed by 7 European nations

that settled German borders with France, Belgium, Czechoslovakia, & Poland

– Purpose? Promised to respect borders and avoid war

– Why failed? Didn’t permanently end German attacks

Peace Attempts

• Kellog-Briand Pact (1928)– What? Agreement signed

by most nations (including US) to outlaw war

– Purpose? To solve problems by peaceful means & limit size of many navies

– Why failed? No agreements about limiting armies and no enforcement

Role of the United States• World depended on US economy• Dawes Plan allowed US investors

to lend money to foreign nations to help economies grow; US investors lent $7.8 billion ($4 billion to Germany)

• Great Depression caused by:– Unequal distribution of wealth– Overproduction (farms & factories)– War debt– Stock Market Crash of 1929

• To keep money in the US, the government called in loans & passed protective tariffs

• US economy collapsed• 25% unemployment until WWII

begins

Results of the Great Depression

• US- creditor until depression; FDR’s New Deal took in public $ to use for welfare/relief, create jobs

• Great Britain- dependent on exports so left gold standard & exports increase; unemployment cut in half by 1937

Results of the Global Depression• France- kept going with $33

billion in German reparations until prices rose & wages dropped

• Italy- angry over Treaty of Versailles; highest unemployment until Mussolini built military and industry

• USSR- Lenin used NEP (New Economic Policy) to restore economy then Stalin replaced with Five Year Plans to collectivize farming and factories

Results of the Global Depression• Japan- creditor until crop

failures; urban unemployment & rural poverty; militarize & industrialize while looking for more resources

• Germany- 30% unemployment; hyperinflation; people blamed Weimar Republic for accepting Treaty of Versailles; Hitler built military & industry