Kenneth's Ch. 34 Outlines Pt 1

Kenneth Li Euro Hist. 5-2-08 Period 6th Ch. 34 pgs 947-954 I. Depression, European Dictators, and the American New Deal A. Intro 1) In the 2 decades that followed conclusion of Paris Settlement, western world saw number of experiments in politics and economic life. i) These new governments immediately faced problems of postwar reconstruction, economic dislocation, and nationalistic resentments. 2) Second, beginning in early 20s, major economic downturn known as Great Depression began to spread across world. i) In U.S. response to Depression led to much-increased role for federal government in life of nation. II. After Versailles: Demands for Revision and Enforcement 1) Paris settlement fostered both resentment and discontent. i) Arrangements for reparations led to endless haggling over payments. ii) There were demands for further border adjustments. iii) All too many political figures were willing to fish in troubled international waters for large catch of domestic votes. III. Toward the Great Depression in Europe 1) Three factors combined to bring about intense severity and extended length of Great Depression. i) To this was added a crisis in production and distribution of goods in world market. ii) Finally both of these difficulties became worse than they might have been b/c no major western European country or the U.S. provided strong, responsible economic leadership. A. Financial Tailspin 1) As one of chief victors in war, France was determined to collect reparations from Germany. i) European allies also owed various debts to each other. ii) Most of money that Allies collected from each other went to U.S. 2) Quest for payment of German reparations caused one of major diplomatic crises in 1920s; crisis itself resulted in further economic upheaval. i) On Jan. 11, to ensure receipt of hard-won reparations, French troops occupied the Ruhr mining and manufacturing district. ii) The Germans paid, but its victory cost France dearly. iii) Britain became more suspicious of France and more sympathetic to Germany. 3) Political and economic turmoil of Ruhr invasion led to international attempts to ease German payment of reparations.

i) At same time, large amounts of American investment capital were pouring into Europe. ii) Crash of Wall Street in October 1929-result of virtually unregulated financial speculation-saw loss of large amounts of money. 4) As credit for Europe began to run out, major financial crisis struck continent i) German banking system consequently came under severe pressure and was saved only through government guarantees. ii) The next year the debts owed to U.S. were settled either through small token payments or simply through default. iii) Hoover moratorium was prelude to end of reparations, in effect, the era of reparations to a close. B. Problems in Agricultural Commodities 1) In 1920s witnessed contraction in market demand for European goods relative to Continent’s productive capacity. i) Although this helped consumers, it decreased income of European farmers. ii) These problems were especially acute in central and eastern Europe and abetted farmers’ disillusionment with liberal politics. 2) Outside Europe similar problems affected other producers of agricultural commodities. i) People who produced these goods in underdeveloped nations could no longer make enough money to buy goods from industrial Europe. ii) As world credit collapsed, economic position of these commodity producers worsened. 3) Result of collapse in agricultural sector of world economy and financial turmoil was stagnation and depression for European industry. i) Persistent unemployment in Great Britain and, to a lesser extent, in Germany during 1920s had created “soft” domestic markets. C. Depression and Government Policy 1) Depression did not mean absolute economic decline or total unemployment. i) Depression also frustrated normal social and economic expectations. ii) Even employed often seemed to make no progress. 2) Governments of late 1920s and early 1930s were not particularly well suited in either structure or ideology to confront these problems. 3) Great Britain and France undertook moderate political experiments. i) Under pressure of Depression and at urging of King MacDonald organized a National Government, which was coalition of Labour, Conservative, and Liberal Parties. 4) Most important French political experiment was Popular Front Ministry, which came to office in 1936. i) Popular Front addressed major labor problems in French economy. ii) Political changes in Britain and France were only of domestic significance. IV. The Soviet Experiment 1) Consolidation of Bolshevik Revolution in Russia established most extensive and durable of all 20th century authoritarian governments.

i) Unlike Italian Fascists or German National Socialists Bolsheviks seized power violently through revolution. ii) Its early membership rarely exceeded more than 1 percent of Russian population. iii) Marxist-Leninist ideology was broader than nationalism of Fascists and racism of Nazis. iv) Fear of communism and determination to stop its spread became one of leading political forces in western Europe and the U.S. for most of rest of the century. A. War Communism 1) Within Soviet Union Red Army under organizational genius of Leon Trotsky had suppressed internal and foreign military opposition to new government. i) Throughout civil war Lenin had declared that Bolshevik Party was imposing dictatorship of the proletariat. ii) Under economic policy of “War Communism” revolutionary government confiscated and then operated banks, transport facilities, and heavy industry. 2) “War Communism” helped Red Army defeat its opponents. i) Alliance of workers and peasants forged by slogan of “Peace, Bread, and Land” had begun to dissolve.