1. THE INTERWAR YEARS

2. 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

3. 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

4. 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

5. 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

7. 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

8. 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