Conflict and tension

• Interwar period


  The pivotal 20 years that fell between the end of the First World War and the Second World War
• The effects of World War One were really profound for Europe - over ten million people were killed and twice that number was wounded
• With the end of the First World War, the international system was seen as torn down and Europe was reorganized, and a new world was born
• The European nations that had fought the Great War emerged economically and socially crippled
• Economic depression prevailed in Europe for much of the interwar period and debtor nations found it impossible to pay the debts without borrowing even more money at higher rates
• Germany was especially destroyed economically by World War One and even if it had a few golden years between 1924 to 1929, it ultimately suffered very strong aftermaths and very negative consequences
• Reparation payments


  Payments to Britain and France which were forced on Germany by the Treaty of Versailles and were impossibly high
• League of Nations


  • Represented an effort to break the pattern of traditional power politics and bring international relations into an open and cooperative forum in the name of peace and stability
  • Established in Geneva with an assembly, a smaller council, and the basic principle of collective security
• The League of Nations lacked teeth and the USA ultimately declined to join
• The political atmosphere of the interwar period was sharply divided between those who thought the extreme left could solve Europe's problems and those who desired leadership from the extreme right
• Totalitarian states in Europe and communism in the Soviet Union under Stalin's leadership, as well as fascism in Germany, Italy and Spain, took hold during the interwar years
• The extremist nature of these disparate ideologies turned European politics into an arena for sharp conflict, erupting in the Spanish Civil War
• Fascism and communism attracted more followers during the interwar years than ever before
• Instability and poorly operating, often dictatorial governments were typical of European states during the interwar period, making them easy targets for rearmed Germany in the late 1930s
• Europe emerged from World War One much weakened, with American financial dominance and European debt overshadowing economic relations in the first decade after the war
• Reparations


  The payments that the losing countries from the First World War had to keep on paying to the winning allies, which had a crippling effect on Germany's economy
• Article 231 of the Treaty of Versailles forced Germany to sign a war guilt clause, which was not actually true as the war had started between Serbia and Austria-Hungary
• The Treaty of Versailles provided for the military and economic dismemberment of the German States along with the requirement of impossible reparation payments
• Germany suffered through starvation, mass employment, rampant inflation, all made unbearable by the Great Depression
• The Great Depression was the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1930
• The Great Depression began after the stock market crash in the US in October 1929, which sent Wall Street into a panic and wiped out millions of investors
• Over the next several years, consumer spending and investment dropped, causing steep declines in industrial output and employment as failing companies laid off workers
• The US suffering the Great Depression was unable to give money to other countries that relied on it to rebuild their economies after the First World War, causing a domino effect where other countries also fell into depression
• By 1933, when the Great Depression reached its lowest point, some fifteen million Americans were unemployed and nearly half the country's banks had failed
• Throughout the 1920s, the US economy expanded rapidly and the nation's total wealth more than doubled between 1920-1929, a period dubbed the Roaring Twenties
• The US suffered a Great Depression and was unable to provide money to other countries to rebuild their economies after World War I
• The Great Depression led to a domino effect where other countries like Germany also fell into depression
• At the lowest point of the Great Depression, 15 million Americans were unemployed and nearly half the country's banks had failed
• Causes of the Great Depression

  • Rapid economic expansion in the 1920s
  • Reckless speculation in the stock market
  • Low wages and high consumer debt
  • Struggling agricultural sector
  • Banks with excess large loans
• Stock market crash of 1929

  1. Stock prices reached unsustainable levels

  2. Credit squeeze or loss of confidence caused demand to fall, goods to pile up, and prices to plummet

  3. Black Tuesday on October 29, 1929 saw 16 million shares traded and investors wiped out
• After the stock market crash

  Downturn in spending and investment led to factories and businesses slowing production and firing workers
• The global adherence to the gold standard contributed to the spread of economic troubles from the US to the rest of the world, especially Europe
• The US enacted the Smoot-Hawley Tariff Act in 1930, increasing import duties to around 50%, leading to unrest
• Highly respected banks in the US and Europe failed, including the Credit-Anstalt in Vienna in 1931
• Industrial production fell by 40% in Germany, 14% in Britain, and 29% in France during the Great Depression
• Some European countries responded to the Great Depression with deflation, reducing export prices by cutting wages and costs, leading to social unrest
• Other countries responded by devaluing their currencies and leaving the gold standard, or imposing exchange controls to cut their economies off from world markets
• The rise of totalitarian dictatorships was a phenomenon of the interwar period in Europe, including the Bolshevik Revolution in Russia, the fascist party in Italy, and the Nazi regime in Germany
• Key events and dates of the interwar period

  • 1919 - Treaty of Versailles signed
  • 1920 - First meeting of the League of Nations
  • 1921 - Washington Conference on naval armaments
  • 1922 - Mussolini made Italian premier
  • 1924 - Lenin dies, Stalin takes power
  • 1924 - Cartel de Gauche wins French election
  • 1925 - Locarno Pact signed
  • 1926 - Pilsudski becomes dictator in Poland
  • 1931 - Spanish monarchy overthrown, Republic born
  • 1932 - Gombos becomes dictator in Hungary
  • 1932-1934 - Stalin's purges in the Soviet Union
  • 1933 - Hitler appointed Chancellor of Germany
  • 1936 - Spanish Civil War begins
  • 1938 - Munich Pact signed
  • 1939 - Spanish Civil War ends, Franco takes power
  • 1939 - Britain and France declare war on Germany
• Smoot-Hawley Tariff Act


  A 1930 US law that increased import duties to around 50%, leading to unrest and worsening the Great Depression