After the Quiz… Grab a primary source document booklet Open to document 28-3 Read it carefully BY YOURSELF, and try answering the “reading and discussion questions” at the end of the doc.

European Economics after WWI 3/6/12

Europe in 1919

Continental overview 1920’s = a time of insecurity, a short-lived upswing, and finally a collapse The huge number of deaths the war caused robbed Europe both of producers and consumers After the war, the break up of the Austrian- Hungarian empire produced many small countries – different taxes, tariffs and tolls – strangled internal European trade

Decrease in World Trade:

London Conference May 1921: Allies met in London to determine reparations Germany charged $31.5 billion to be paid for at $500 million per year. Germany shocked, afraid and mad – Prompted loud anti-western response from German army and conservatives

German Crisis Germany paid its reparations in 1921 & 1922 but refused to pay in Jan This resulted in the French invasion of the Ruhr.

Ruhr Crisis France invaded the Ruhr valley, a German industrial area in response to the missed payment. The United States and Britain did nothing to stop her, although they did protest weakly German workers responded with “passive resistance” (general strike in the region) throwing the economy into chaos.

Ruhr Crisis

Inflation The German mark which had traded at 4 to the dollar in 1914, traded at 64 to the dollar by Jan., By November, 1923, it took 800 million marks to make one dollar The middle class saw the value of their savings wiped out through inflation, and this, plus the defeat and trauma of the war, helped produce acceptance of Nazism.

Inflation

German Unemployment:

Economic Disaster To support the workers on strike, the German government began printing paper money, but this led to runaway inflation Sometimes workers were paid twice a day so they could run to the stores to buy things before the prices went up Spiraling (“Weimar”) inflation (eventually being revalued hourly) wiped out most Germans, especially the middle classes who lost entire lifetimes of savings.

German “Revolutions” [1918]

Spartacus Uprising Sparticus League formed 1916 to oppose WWI Sparticus League formed 1916 to oppose WWI Radical socialists/Communist Party, 1/1919 Radical socialists/Communist Party, 1/1919 Led by Rosa Luxemberg and Karl Leibknecht Led by Rosa Luxemberg and Karl Leibknecht Opposed the SPD government of Friedrich Ebert in Opposed the SPD government of Friedrich Ebert in

Spartacus, cont. Jan. 6-15, 1919: Communist General Strike Jan. 6-15, 1919: Communist General Strike Put down by militia Put down by militia Luxemberg and Leibknecht arrested and murdered by counterrevolutionary volunteers Luxemberg and Leibknecht arrested and murdered by counterrevolutionary volunteers Claimed the 2 had tried to escape Claimed the 2 had tried to escape Government depended on army to survive. Government depended on army to survive. Allowed the army and conservatives to use propaganda to claim there was a huge communist threat Allowed the army and conservatives to use propaganda to claim there was a huge communist threat Turned people against communists. Turned people against communists.

Sparticist Poster

The Spartacist League Rosa Luxemburg [ ] murdered by the Freikorps

German Freikorps

Economic Recovery Germany was on the brink of revolution and complete economic collapse Pres. Ebert appointed Gustav Stresemann to Chancellor in Aug – New currency (1 Rettenmark = 1 trillion old marks) – Ordered Ruhr back to work – Crushed extremists – Appealed to US for help against French Occupation

Extremism In response to the problems they faced, conservative extremists began to emerge. Nov. 9, 1923: Beer Hall Putsch – Hitler and Ludendorff led a coup in Munich – 16 Nazis killed and Hitler and Lud. were arrested. – Ludendorff freed – Hitler served a few months of his 5 year sentence during which he wrote “Mein Kampf”

From the German Point of View  Lost—but not forgotten country.  Into the heart You are to dig yourself these words as into stone: Which we have lost may not be truly lost!

Economic Recovery Dawes Plan, 1924 – Negotiated with the US Sec. of the Treasury as the mediator – Lowered reparation payments—based on the German economy – France agreed to leave the Ruhr by 1925 Eased the financial burden, but many Germs still upset that they lost their wealth. American banks began lending Germany money privately to pay the reparations, money that Germany then paid to France and Britain, which they then used to buy goods in the United States Worked ok until the stock market crashed and US banks quit lending money.

European Debts to the United States

The Dawes Plan (1924)

Locarno Agreements Negotiated Oct. 1925—”Spirit of Conciliation” in Europe Guaranteed Germany’s W. borders Britain and Italy given the responsibility of protecting the Rhineland Germany invited to join the League of Nations Germany allowed to negotiate her E. borders

Kellogg-Briand Pact 1928: outlawed “war as an instrument of national policy.” Signed by the US, Japan, and most European nations Idealistic statement against war that was short lived.

Boom and Bust Young Plan, 1929 – replaced the Dawes plan. – Reduced reparations payments were continued. – Continued Germany’s economic recovery US Stock Market Crash, Oct – Prompted an economic depression in America, followed by an economic depression in Europe by : Kreditanstalt (major Austrian bank) crashed, taking with it what remained of the European economy

The Young Plan (1930) For three generations, you’ll have to slave away! $26,350,000,000 to be paid over a period of 58½ years. For three generations, you’ll have to slave away! $26,350,000,000 to be paid over a period of 58½ years.

The Great Depression [ ] Paris in 1930 London in 1930