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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
• 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