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Chapter 27
 hyperinflation- a runaway inflation where prices increase astronomically
 George Grosz painted “The Pillars of Society” (shown) showing postwar Germany
 inflation: doubled in Britain, America, Germany, Canada, Japan; tripled in France, Sweden;
quadrupled in Italy; hyperinflation in Germany
 hyperinflation in Germany was caused by the government printing money to pay for war, pay
miners who used to work in now-French-occupied Ruhr
 before World War I, east-central Europe was divided among the Ottoman, Habsburg,
Russian, and German empires; divided into new independent states after World War I
 Estonia, Latvia, Lithuania- Baltic states
 Czechoslovakia- carved out of former Habsburg lands
 Yugoslavia- pieced together from a patchwork of territories
Three Reasons Why New States Didn’t Work
 1) honoring rights of nationalities was difficult; ex. in Czechoslovakia, Czechs dominated
Slovaks and Germans although Czechs were minority
 2) east-central Europe was agricultural, big nations could profit, borders made little economic
sense; ex. Danube River basin was profitable under the Habsburg Empire
 3) creating new economic units was hard for inexperienced new nations
Let’s Keep Fighting
Poland vs. Russia (6 months 1920-1921)
 Poland wants to reclaim the Ukraine lands and become the size it was a century ago;
Bolsheviks beat up Poland in return and (like always) try to start revolution; French come to aid
of Poles and the Treaty of Riga is signed 1921, giving Poland much of the territory it wanted
 new states cried and wanted each other’s lands, Hungary especially; big nations weren’t
happy either, Germany wanted the “corridor”- Polish land between Germany and East Prussia,
Russia wasn’t happy with losing land, etc etc; new nations were supposed to be barrier between
Russia and Germany
Germany
 Germans happily established the Weimar Republic, named for the city its constitution had
been written in, included voting rights for women
 Alsace and Lorraine returned to France, Rhineland became demilitarized zone, Saar district
was under League of Nations and its coal mines went to France
 Germans wanted to be a great power again, wanted liberation of the Rhineland, return of the
Saar, and recovery of the corridor and Silesia from Poland
 Germany signed the Treaty of Rapallo 1922 with Russia in hopes of economic gains,
Gustav StresemanN assumed direction of the German Foreign Ministry worked toward foreign
support and revision of the peace settlements
 StresemanN of Germany, Aristide Briand of France, and Austen Chamberlain of Britain
agreed to the Locarno Treaty at Locarno, Switzerland; Germany, France and Belgium promised
never to go to war with each other, Britain and Italy guaranteed their borders; StresemanN still
wanted Polish lands, secretly rearmed against the Treaty of Versailles
France
 let’s compare: France had less population (40 million to Germany’s 60), lower industrial
production than Germany, was devastated by war, unlike Germany; France had best-equipped
military, Germany was disarmed
 U.S. and Britain wouldn’t make long-term alliance with France, so France allied Poland and
the Little Entente- Czechoslovakia, Romania, Yugoslavia
 without allies: 1923 France willing to enforce the Treaty of Versailles itself, invaded Ruhr as
part of reparations payment, America and Britain condemned use of force
 with allies: 1924-1925 France withdrew from Ruhr and partially from Rhineland, agreed to
lower reparations payments, rejected the use of force, promoted German economic recovery
 Maginot Line- late 1920s defensive fortifications constructed by France on border of France
and Germany
United States
 Britain and France needed U.S. help to control Germany if it regained power
 U.S. wouldn’t join League of Nations, signed separate peace treaty with Germany after
WWI, all because wanted to be mediator in Europe and avoid political and military obligations
 League of Nations couldn’t last without machinery or U.S. support, hopes for its success
collapsed in 1931 when it failed to deal with crisis of Japanese aggression against Manchuria
 Kellogg-Briand Pact- signed by 23 nations 1928, renounced war; devised by U.S. Secretary
of State Frank B. Kellogg and French foreign minister Aristide Briand
Money, Loans, Etc.
 France and Great Britain owed money to United States; United States wouldn’t forgive loans
or take less valuable money;
 Britain, France, Belgium relied on reparations from Germany, calculated on the damage
they inflicted; postwar Reparations Commission determined Germany owed 132 billion gold
marks ($33 billion), paid in annually 2 billion marks and 26% value of exports
 1924 reparations would hurt Germany, no reparations would hurt France; Germany printed
money to repay and the mark collapsed; British and Americans decided to intervene, American
banker Charles G. Dawes along with international finance experts devised the Dawes Plan to
end inflation by giving Germany a more modest schedule and a loan from the United States
 United States made high tariffs to protect domestic trade, but stopped European nations from
selling to the US and getting money to pay
 1929 American businessman and chairman of the board of General Electric, Owen D.
Young, and American bankers devised the Young Plan which would initially transfer $100
million to Germany
 United States began to leave loans to other nation and invest at home
Economy Goes Ka-boom
 October 1929 United States stock market crashes, setting off the Great Depression
 depression- “severe downturn marked by sharp declines in income and production as buying
and selling slow down to a crawl
 crash occurred because of excessive U.S. loans to others and sudden investment at home
 peak of depression 1932, one/four American workers without a job, one/three banks closed
 affected other nations, especially when the Smoot-Hawley Tariff Act was passed to create an
impenetrable tariff fortress against imports
 gold poured into U.S. banks, Herbert Hoover supported a moratorium on payment of
reparations and war debts, leading to the collapse of Britain as world’s greatest financial center
Attempted Recovery
 the gold standard leaves international economy and never returns
 major nations of Europe and the U.S. meet at Lausanne, Switzerland 1932; depression
showed no sign of stopping, got rid of reparations and war debts
 Britain- Labour cabinet resigned, new cabinet composed to deal with emergency
 United States- Democrats replaced republicans 1932 with election of Franklin D. Roosevelt
Russia’s Issues
 Lenin’s successor Joseph Stalin “obliged the Soviet people to achieve in a single
generation” “what it had taken the West a century and a half to accomplish”
 Lenin, following Karl Marx, led a revolution to allow the people to rule, at the end the
Bolsheviks were ruling
 famine an epidemic 1921-1922 killed more than the Great War and civil war combined
 governing system: the Central Committee of the Communist party decided “fundamental
questions of policy, international, and domestic”, but the Politburo, seven-man inner circle of
the Central Committee, held the reins of power
 three members of the Politburo: Leon Trotsky (brilliant), Nikolai Bukharin (popular), and
Joseph Stalin (political)
 Leon Trotsky, commissar of war at the time, favored militarization of labor; Lenin favored a
proletarian democracy and independent unions
 controversy was resolved at the Tenth Party Congress 1921 when Lenin chose something in
the middle, a “temporary retreat” from Communist goals
 this New Economic Policy (NEP) allowed peasants to have private trade in their own terms
as long as they provided a fixed portion of their yield to the state
 Bukharin wanted to industrialize a poverty-stricken nation- peasants would control their
own surpluses and profits would be used for industrial development
 1924 tax in cash replaced tax in kind, therefore government worked through commercial
agents instead of directly with peasants
 1927 peasants held back grain, Bolshevik leaders feared conspiracy led by Britain, lowered
the cost of grain, hurting the peasantry
 Lenin died, Joseph Stalin tried to prevent peasants from disposing of their grain surpluses;
peasants rioted
 Trotsky was expelled 1927, found refuge in Mexico 1929, assassinated by Stalin 1940
 Bukharin was arrested in 1937, tried and executed for treason
Iosif Vissarionovich Dzhugashvili
 chose his revolutionary name “Stalin” which means “steel”; ruled Soviet Union 1928-1953
 was born in Georgia, son of a shoemaker who wanted him to also be a shoemaker, mother
secretly gave him schooling, learned about revolutionary socialist politics, joined the
underground Marxist movement and followed Lenin
 after October Revolution of 1917, was people’s commissar for nationalities, then general
secretary of the Central Committee of the Communist party
 bolstered his reputation, and Lenin’s after he died; eliminated enemies and advertised himself
Five Year Plans
First
 Stalin’s Five Year Plans squeezed profits out of agriculture and increased industrial
production between 300 and 600 percent; other nations didn’t join in socialism, worked on
Soviet Union only
 First Five Year Plan- used agricultural profits to industrialize quickly, put everyone to work
 in 1929, after grain crisis of 1928, Stalin used collectivization: confiscated all farms and
establishing state-run farms; also deported the kulaks- wealthy peasants, means “the tight-fisted”
 25 million peasant families were miserable, 5 million peasants died between 1929 and 1932
Outside Russia
 Lenin had believed that other nations would follow and become socialist as well, didn’t
happen, so Stalin looked for alliances instead, made Treaty of Rapallo with Germany 1921, and
all other major countries instead of the United States by 1924, cooperated at a worlddisarmament conference in Geneva
 the Communist International, or Comintern, was based in Moscow and had representatives
in 37 countries by 1920 to support communism
 Bukharin and Stalin had supported the Comintern, then Stalin in 1929 believed capitalist
nations were on the verge of revolution, broke ties between communists and democratic
socialists to prepare
Second
 Second Five Year Plan- reduced dependence on imports; Soviet Union was heavily
industrialized and urbanized, stricter discipline was enforced
 between 1934 and 1938, Stalin had 300,000 people killed and seven million put into labor
camps in what’s known as the Great Purge; all opponents, were labeled class enemies, the most
popular, those who worked with him in the Bolshevik revolution, were put on show trials, where
they were intimidated, tortured, and forced to confess to false accusations; prevented internal
accusations although Germany posed a problem; slowed industrialization by killing qualified
personnel
Women
 Soviet women participated in the revolution; Lenin denounced housework; after October
Revolution of 1917, established equality within marriage; 1920 abortion legalized; right to vote
in 1917
 women had maternity leaves and nursing breaks by law, were therefore hired last and fired
first; divorce left financial responsibility to mother
 birthrates plummeted in 1930s, 1936- couldn’t end first pregnancy, 1940s banned abortions
 under Stalin, women had a full-time job and worked hard at home
Fascist Italy
 fascism- dictatorship by a charismatic leader, promised lotsa things, from fasces- bundle of
rods with ax head carried by magistrates of the Roman Empire; practiced in England, Hungary,
Spain, and France, but most importantly in Italy
 nazism- National Socialism, German variant,
 Italians were unhappy with peace settlements, recent electoral system created chaos, lack of
coherent political programs, Fascist party under Benito Mussolini entered politics
Mussolini
 socialist, arrested for Socialist activities and placed under state surveillance, volunteered to
fight in WWI, promoted to corporal, injured during firing practice, returned as editor of his
newspaper to promote war Il Populo d’Italia (“The People of Italy”)
 Mussolini wanted to be to Italy what Lenin was to Russia; identified bolshevism,
communism, and big businessism, socialism, Catholicism, and unions as enemies
 preferred to be called Il Duce (“the leader”)
 near civil war in early 1920s between Italian Communists and Fascists in the streets
 unemployment and inflation allowed the March on Rome to take place on October 28, 1922
when Fascism and Mussolini took over Italy
 squadristi – armed bands of Fascist thugs – attacked enemies of Fascism
 Socialist critic of Fascist violence, Giacomo Matteotti, was murdered, resulting in threatening
protests
 Mussolini responded by silencing enemies and free press, creating secret police, etc.
Big Businnesses and the Church
 Fascists gave industrialists a position of privilege in exchange for support, ensured
dominance of capital and labor
 Italy didn’t do well during Great Depression
 Mussolini technically supported corporatism- a system of economic self-rule by interest
groups; gave Mussolini controlling interests over key industries
 Mussolini, an atheist, raised the “Roman Question” by depriving the pope of his territories in
Rome; became a problem, so Mussolini agreed with Pope Pius XI on the Lateran Treaty and
the Concordat, granted the pope territory around St. Peter’s Basilica and the Vatican, protected
the role of Catholicism in education and marriage laws
Beating Up the Little Guys
 Mussolini’s popularity plummeted after failing to initiate effective social programs, started
beating nations up to gain support
 Italy conquered Ottoman-controlled Libya in 1911
 Mussolini invaded poor little Ethiopia on 1935, proclaimed it an Italian territory; League of
Nations couldn’t stop him; Britain and France expressed disapproval; Mussolini had no friends,
so he took Hitler, Italy allied Germany as the Rome-Berlin Axis 1936, agreed to offer each other
military support offensively or defensively in the Pact of Steel 1939
 Albania made agreements with Italy and became financially and militarily dependent 1933,
Mussolini invaded and annexed it in order to catch up with Hitler annexing Czechoslovakia 1939
Nazi Germany
 Germans didn’t like reparations, promoted inflation which went out of control
 Weimar Republic experienced growth after the war, social welfare grew scaring businessmen
 people didn’t like parliamentary democracy, became ineffective, Heinrich Bruning,
chancellor 1930-1932 tried to override the constitution, was forced to resign
Hitler
 Adolf Hitler- saw weakness of Weimar Republic, promised a way out of economic hardships
 Stalin born in George, Hitler born in Austria
 father was a customs agent on Austrian side of border with Germany
 was denied admission to architecture school, volunteered in Germany army, was wounded
and gassed, received Iron Cross for bravery twice
 believed Germany didn’t lose the war but was backstabbed, wanted Nazi regime
 attempted to take power, failed, known as the Beef Hall Putsch 1923, went to jail for 9
months of a 5-year sentence, wrote his autobiography Mein Kamf (“My Struggle”), found he
needs to take control legally
 became chancellor of Germany in 1933 after Bruning, Nazi party was growing
 German President Paul von Hindenburg invited Hitler to create a government, Hitler
persuaded them to make emergency laws against Communists, which took away freedoms and
ultimately gave Hitler and the Nazis complete power
Empire
 Hitler called his empire the Third Reich (1- medieval German empire, 2- Bismarck’s empire)
 SA – Sturmabteilung – storm troopers – Ernst Rohm – Brownshirts – beat up political
opponents and executing terrorist operations, were 2.5 million members while army had 100,000
 SS – Schutzstaffel – protection squad – Heinrich Himmler – blackshirts – wore skull and
crossbones on their caps, did political policing
 Hitler and SS purged the SA and executed Rohm, making the SS Hitler’s elite corps
Nazi Goals
 Lebenstraum: living space, first introduced in Mein Kampf, right of German master race to
become the world’s greatest empire and exist for thousands of years, superior nations could
annex inferior nations
 rearmament- continued rearming against the Treaty of Versailles as the Weimar Republic had
done, withdrew from the League of Nations and the World Disarmament Conference, openly
renounced the Treaty of Versailles and announced rearming in 1935, moved troops into
demilitarized Rhineland 1936, reversed relation with Soviet Union (Treaty of Rapallo)
 economic recovery: Hitler didn’t want to be dependent on other nations for imports, began
program of autarky- economic self-sufficiency; full employment established 1936, economic
power was concentrated on few businesses like chemical giant I. G. Farben; 1936 Hitler
introduced Four-Year Plan for rearmament and self-sufficiency, couldn’t produce all its needs,
needed to annex nations that could
Propaganda, Racism, Culture
 public: Joseph Goebbels- Nazi party leader appointed to head Hitler’s new Ministry of
Propaganda, Leni Riefanstahl (female) made documentary of Nazi rally at Nuremberg called
Triumph of the Will, recorded Hitler’s ability to influence the public
 the young: Hitler Youth- special Nazi youth organization that instilled Nazi values in
children; 82% of German boys and girls between 10 and 18 were part of an Nazi organization
 women: Hitler believed women belonged at home; German Women’s Bureau under Gertrud
Scholtz-Klink instructed women in their “proper” duties; encouraged large families; woman
began working and serving, however, when war started
 enemies: communism identified as international Jewish conspiracy to destroy German volk
(people); Nazis expelled “asocials”, those deviant in any way including homosexuals; gypsies,
homosexuals, criminals, religious offenders, Jews wore insignia identifying them
 jews: almost immediately (1933) jews were excluded from public employment and higher
education; Nuremberg Laws identified Jews, took away citizenships, and forbade marriage
between non-Jews and Jews; November 9, 1938- Kristallnacht, “night of broken glass”,
synagogues were set afire, books and valuables of Jews confiscated, 91 Jews killed and 20,000 to
30,000 were imprisoned in concentration camps, shops destroyed
Democracies
France
 1936 Leon Blum became premier, was a Socialist, lacked votes to rule with completely
Socialist government, established Popular Front- coalition of Left and Center parties intent on
economic reforms; strikes swept through France, Popular Front intervened, increased wages,
paid vacations, and made collective bargaining, caused reduced productivity
 France started rearming when Germany rearmed, couldn’t afford
Great Britain
 Ramsay MacDonald- Prime Minister of Britain’s socialist Labour government, was
unprepared for 1929 collapse
 coalition of the three parties- Liberal, Conservative, and Labour – took care of problems,
called National Government- centrist, nonpartisan coalition including MacDonald and Stanley
Baldwin- Conservative with a background in iron and steal manufacturing
 National Government got rid of god and devalued the pound; tariffs were established; slowly
recovered
 John Maynard Keynes- urged government spending to stimulate consumer demands
 Sir Oswald Mosley founded the British Union of Fascists (BUF) consisted of goon squads
and bodyguards, developed a corporate model in which interest groups rather than an electorate
would be represented in a new kind of parliament; beat up political opponents, Jews, and eastern
European émigrés living in London; was outlawed in 1936
 National Government did better than the BUF;
Spain
 1931 became a democratic republic after centuries of Bourbon monarchy
 1936 elected a Popular Front government more radical than France’s; social revolution
ignited three years of civil war; Republicans and Popular Front defenders vs. Nationalists
 Spanish Civil War began 1936 with revolt within Spanish army led by General Francisco
Franco, who was allied with the Falange- Fascist party in Spain
 Nationalists led by Franco controlled rural and conservative south and west, Republicans
held cities in north and east (Madrid, Valencia, Barcelona)
 Mussolini and Hitler helped Franco; Germans used Spain as testing grounds for new
technology, including aerial bombings; Soviet Union helped the Republic; Britain stayed neutral;
France couldn’t help the Popular Front; America volunteered to help Republicans, but Texas Oil
Company sold 1.9 million tons of oil to Franco’s insurgents and Ford Motor Company, General
Motors, and Studebaker sold them trucks
 2,800 Americans headed to Spain’s call for help and aided the Republic; émigrés joined in
the International Brigades to defend Madrid; Russia pulled out when France, Britain, and
America didn’t help; Madrid fell to nationalists 1939, Franco set up government sending enemies
to prison or concentration camps