THE INTERWAR YEARS

World War I had been the most devastating war the world had yet seen and following it, many nations began the futile search for stability and peace

Why Peace Fails Weak League of Nations Turns out to be a great failure The United States does not join Americans don’t want to be involved in European affairs Could only use economic sanctions, not military force, to stop aggression The European powers don’t want another war either Great Britain and France will follow the policy of appeasement = will back down and give in to the demands of aggressor nations to maintain peace

WWI and the Treaty of Versailles – Germany is angry over the terms and reparations The Allied Reparations Commission determines Germany owes 132 German marks, which equals 33 billion dollars The new German republic makes its first payment in 1921, but the next year faces financial problems To solve this problem, Germany starts printing more paper money, which leads to inflation

The Great Depression 1914: 42 German marks = 1 U.S. dollar Nov. 1923: 130 billion marks = 1 U.S. dollar, end of 1923: 4.2 trillion marks = 1 U.S. dollar An American banker comes up with a plan to reduce reparations and coordinates Germany’s annual payment plan with its ability to pay The Great Depression Depression = a period of low economic activity and rising unemployment Two factors played a role in the Great Depression Series of downturns in the economies of individual nations – consumer spending had slowed Black Tuesday – U.S. Stock market crash, which leads to an international financial crisis

Effects The United States had been world’s leading money lender and this leads to European banks crashing The two nations hit hardest were the U.S. and Germany – 40% of Germans were unemployed Renewed interest in Marxist doctrines Marx had predicted that capitalism would destroy itself The new democratic gov’ts in Europe, especially Germany, were unable to deal with the crisis Many people turn to political leaders who offer simple economic solutions in return for dictatorial power

Weak Democratic Governments President Wilson claimed that the Great War had been fought to make the world safe for democracy However these new democracies were unable to handle the economic crisis Rise of Dictators Aggressive dictators came to power in Europe and Japan and began making territorial demands Totalitarian state = gov’t that aims to control the political, economic, social, intellectual, and cultural lives of its citizens Achieves this through mass propaganda