Chapter 18 - the great depression

• Young Plan 1929:

  • Created in 1929 to succeed dawes plan which had expired 
  • It reduced germany’s final reparation repayment sum 
  • Germany’s final repayment would have been made in 1988
  • The plan also committed the U.S. to further European development, despite the American isolationist policy. 
• 24th October 1929 Great depression began - black thursday

  nearly 13 million shares changed hands as investors tried to leave the market

  the depression quickly spread as American investors demanded the $6 billion they had lent out from 1924 - 1928
• The ‘Tariff War’

  Protectionism increased 

  In 1930 the U.S. enacted the Smoot-Hawley Tariff which extended the protective tariff to over 20,000 imported goods.  
• The gold standard was suspended during WW1 but restored in 1925. 

  Britain was the first leading economy to remove itself from the gold following the great depression. 

  France and the USA tried to convince britain to stay on it. 

  Leaving the gold standard benefited britain, but came at a cost for the US. 

  The value of the pound fell compared to the dollar, making exports cheaper and imports more expensive WIDEC.

   

  Two blocs emerged; Pro gold standard (france, czechoslovakia, belgium, poland, and italy) and the Sterling Bloc - including the commonwealth and the scandinavian countries. 
• 27th July 1933 - British commonwealth declaration was signed.

  • Aimed to raise prices 
  • Eventually return to gold standard 
  • Ensure stabilisation of exchange rates
• Nazism (national Socialism):

  • Based on fascism 
  • Wanted germany to become a world power again 
  • Blamed german defeat in the war on ‘enemies’ such as communists and Jews 
  • Believed in superiority of Aryans
  • Promised a return to economic stability 
  • Increasing popularity of Right wing ideas made weimar politicians more assertive in international relations, highlighted in the Lausanne and World Disarmament conferences. 
• Rise of the Nazis:

  • November 1923 Munich putsch, hitler throught he could win power due to the bad economic situation
  • Hitelr was then imprisoned but had a lenient sentence 
  • Hitler decided to use election success to gain power
  • In prison he wrote about his ideology in Mein Kampf
  • By the time he was released the economy had recovered and the weimar government was popular
  • The economy soon collapsed again in 1929
  • They gained popularity exponentially following 1929
• The Hoover Moratorium on reparations, 1931

  Proposed in 1930

  • Supported Wall street investors who worried about germany’s ability to repay loans 
  • Agreed that Germany could invest savings in things like railway, but not armaments
  • Began in June 1931 and would last ONE YEAR. 
  • *The french didn't like it as it was an Anglo-American deal to help Germany at France's expense.
• Lausanne Conference on Reparations, 1932

  • The issues of the reparations had to be settled as the Hoover Moratorium was coming to an end. 

  Delegates came from Britain, France, Belgium, Italy , and Germany.

  • French delegate was prime minister Herriot who said that Germany could afford to pay but chose not to
  • German delegate was Von Papen argued that reparations were unrealistic and dangerous
• Outcome of Lausanne Conference, 1932:

  • The world disarmament conference overshadowed the Lausanne conference
  • PM Macdonald wanted to link disarmament and abandoning reparations
  • Lausanne decided that reparations would end, with Germany paying a final 3000 million marks as a lump sum (10% of its outstanding debt) paid to the Bank of international settlements
  • Wasn’t ratified as all the creditor nations didn’t want to proceed until they had decided how to compensate the USA
• Reaction to Lausanne conference, 1932:

  • USA were unhappy as the agreement was debtor nations cancelling their own debt.
  • relations between France and the USA worsened
  • The delegates wanted a world economic conference to address the depression
  • It cancelled out treaty of Versailles and the Young Plan  
  • The last German one off payment never happened
  • The abandonment of reparations was unpopular in France.
• During the Lausanne conference of 1932, the Nazis doubled their seats in the Reichstag
• London Conference 1933 (world economic and monetary conference)

  
  

  12th June - 27th July 1933

  66 nations present

  Aims:

  • Restore economic confidence and raise prices
  • Encourage economies back to the Gold standard
  • Halt protectionism 
  • Increase world trade
• disagreements At London conference:

  The disagreement that ‘killed the conference’ was currency stabilisation.

  FDR had taken the US off the gold standard in April 1933

  some bankers proposed fixing the dollar at a low value.

  On 3rd July Roosevelt said to the conference that he would not support any stabilisation proposal that would limit US freedom to recover from the depression.

  • Britain declared they wouldn’t return to gold standard

  There was NO International Effort to resolve the depression, and the world powers put their own national interests first.
• Disagreements at london economic conference, 1933:

  • france blamed slump in world trade on Britain's abandoning of the gold standard
  • Britain's main aim was the abolition of War debt as they still owed lots to the USA. 
• Reactions to London conference:

  Germany:

  • Nazi germany adopted the policy of AUTARKY (economic self-sufficiency)

  Japan:

  • Hirohito’s Japan had already turned to empire building in order to solve their problems
  • They looked to expand into Manchuria.

  Historians views on London conference:

  • Many blame Roosevelt for failure of the conference 
  • Zara Steiner thinks that Britain and France also had no solutions to the depression. 
• World Disarmament Conference 1932-1934


  
  

  FEB 2nd 1932 - 59 nations met in Geneva.

  Nov 1931 - the league of nations agreed to freeze arms productions while the conference was ongoing. 

  • July 1932 - many resolutions had been put forward; size of artillery, banning of tanks, banning the aerial bombing of civilians and banning the use of gas. 
  • Nations were reluctant to give up developing bomber planes
• world disarmament conference 1932:

  German delegates argued that all countries should disarm to the levels of Germany - this was rejected and they left the conference.

  
  

  In January 1933 - when the ‘equality of armaments’ was accepted, German delegates then returned.
• *The Weimar republic had started a secret rearmament programme by 1928.

  A 5 year plan to expand the army, build planes and tanks which were developed on Russian soil as part of the Treaty of Rapallo
• following the smoot-hawley tariff Britain returned to their 19th century strategy of trading predominantly within the empire. 

  The 1932 import duties act ended the british policy of free trade, imposing 10 percent tariff on imports except those from india, south Rhodesia, and the common wealth

  France had a similar arrangement with its own colonies. 
• Hitler & disarmament:

  • 30th January 1933 - Hitler becomes chancellor and removes Germany from the conference and the league of nations in October.
  • The disarmament conference ends in failure in 1934. 
• leaders in 1933:

  • Hitler (chancellor of Germany)
  • FDR (U.S. president)
  • Daladier - french leader

  Briatins leaders:

  • Ramsay Macdonald still PM but head of a National (coalition) government 
  • Dominated by conservatives (like stanley Baldwin and Neville Chamberlain)