Chapter 26 - Europe Between the Wars, 1919-1939


ONLY TWENTY YEARS after the Treaty of Versailles, Europeans were again at war. Yet in the 1920s, many people assumed that the world was about to enter a new era of international peace, economic growth, and political democracy. In all of these areas, the optimistic hopes of the 1920s failed to be realized. After 1919, most people wanted peace but were unsure how to maintain it. The League of Nations, conceived as a new instrument to provide for collective security, failed to work well. New treaties that renounced the use of war looked good on paper but had no means of enforcement. Then, too, virtually everyone favored disarmament, but few could agree on how to achieve it.

Europe faced serious economic and social hardships after World War I. The European economy did not begin to recover from the war until 1922, and even then it was beset by financial problems left over from the war and, most devastating of all, the severe depression that began at the end of 1929. The Great Depression brought misery to millions of people. Begging for food on the streets became widespread, especially when soup kitchens were unable to keep up with the demand. Larger and larger numbers of people were homeless and moved from place to place looking for work and shelter. In the United States, the homeless set up shantytowns they derisively named “Hoovervilles” after the U.S. president, Herbert Hoover. Some of the destitute saw but one solution; as one unemployed person expressed it, “Today, when I am experiencing this for the first time, I think that I should prefer to do away with myself, to take gas, to jump into the river, or leap from some high place.... Would I really come to such a decision? I do not know. Animals die, plants wither, but men always go on living.” Social unrest spread rapidly, and some unemployed staged hunger marches to get attention. In democratic countries, more and more people began to listen to and vote for radical voices calling for extreme measures.

According to Woodrow Wilson, World War I had been fought to make the world safe for democracy, and for a while after 1919, political democracy seemed well on its way. But hope soon faded as authoritarian regimes spread into Italy and Germany and across eastern Europe.

An Uncertain Peace

FOCUS QUESTION: What was the impact of World War I, and what problems did European countries face in the 1920s?

Four years of devastating war had left many Europeans with a profound sense of despair and disillusionment. The Great War indicated to many people that something was dreadfully wrong with Western values. In The Decline of the West, the German writer Oswald Spengler (1880-1936) reflected this disillusionment when he emphasized the decadence of Western civilization and posited its collapse (see the box on p. 798).

The Impact of World War I

The enormous suffering and the deaths of almost 10 million people shook traditional society to its foundations and undermined the whole idea of progress. New propaganda techniques had manipulated entire populations into maintaining their involvement in a senseless slaughter. How did Europeans deal with such losses? In France, for example, probably two-thirds of the population was in mourning over the deaths of these young people.

An immediate response was the erection of war memorials accompanied by ceremonies to honor the dead. Battlefields also became significant commemorative sites with memorial parks, large monuments, and massive cemeteries, including ossuaries or vaults where the bones of thousands of unidentified soldiers were interred. Virtually all belligerent countries adopted national ceremonies for the burial of an Unknown Soldier, a telling reminder of the brutality of World War 1. Businesses, schools, universities, and other corporate bodies all set up their own war memorials.

It is impossible to calculate the social impact of the mourning for the lost soldiers. One French mother explained, “No matter how proud as Frenchwomen we poor mothers may be of our sons, we nevertheless carry wounds in our hearts that nothing can heal. It is strongly contrary to nature for our children to depart before us.” Another Frenchman wrote, “Why should the old people remain alive, when the children who might have initiated the most beautiful era in French history march off to the sacrifice?”

World War I created a lost generation of war veterans who had become accustomed to violence. In the course of the war, extreme violence and brutality became a way of life and a social reality. As one Frenchman recounted: “Not only did war make us dead, impotent or blind. In the midst of beautiful actions, of sacrifice and self-abnegation, it also awoke in us, ... ancient instincts of cruelty and barbarity. At times, I, who have never punched anyone, who loathes disorder and brutality, took pleasure in killing.” After the war, some veterans became pacifists, but for many veterans, the violence of the war seemed to justify the use of violence in the new political movements of the 1920s and 1930s (see “The Authoritarian and Totalitarian States” later in this chapter). These men were fiercely nationalistic and eager to restore the national interests they felt had been betrayed in the peace treaties.

The Search for Security

The peace treaties at the end of World War I had tried to fulfill the nineteenth-century dream of nationalism by redrawing boundaries and creating new states. Nevertheless, this peace settlement had left many nations unhappy. Conflicts over disputed border regions poisoned mutual relations in eastern Europe for years, and many Germans viewed the Peace of Versailles as a dictated peace and vowed to seek its revision.

The U.S. president Woodrow Wilson had recognized that the peace treaties contained unwise provisions that could serve as new causes for conflicts and had put many of his hopes for the future in the League of Nations. Although it had some success in guaranteeing protection for the rights of the many ethnic and religious minorities that remained in some of the newly formed states, the League was not particularly effective at maintaining the peace. The failure of the United States to join the League and the subsequent American determination to be less involved in European affairs undermined the League’s effectiveness from the beginning. Moreover, the League’s sole weapon for halting aggression was the imposition of economic sanctions such as trade embargoes that often failed to prevent League members from engaging in military action. Efforts to promote disarmament were also ineffective, despite provisions in both the League’s covenant and the Treaty of Versailles.

The weakness of the League of Nations and the failure of the United States to honor its promise to form a defensive military alliance with France left the French feeling embittered and alone. Fear of German aggression led them to reject the possibility of disarmament. Before World War I, France’s alliance with Russia had served to threaten Germany with the possibility of a two-front war. But Communist Russia was now a hostile power. To compensate, France built a network of alliances in eastern Europe with Poland and the members of the so-called Little Entente (Czechoslovakia, Romania, Yugoslavia). Although these alliances looked good on paper as a way to contain Germany and maintain the new status quo, they overlooked the fundamental military weaknesses of those nations. Poland and the Little Entente states were not substitutes for Russia.

THE FRENCH POLICY OF COERCION (1919-1924) Unable to secure military support through the League of Nations, France sought security between 1919 and 1924 by relying primarily on a strict enforcement of the Treaty of Versailles. This tough policy toward Germany began with the issue of reparations, the payments that the Germans were supposed to make to compensate for the “damage done to the civilian population of the Allied and Associated Powers and to their property,” as the treaty asserted. In April 1921, the Allied Reparations Commission settled on a sum of 132 billion marks ($33 billion) for German reparations, payable in annual installments of 2.5 billion (gold) marks. Confronted with Allied threats to occupy the Ruhr valley, Germany’s chief industrial and mining center, the new German republic accepted the reparations settlement and made its first payment in 1921. The following year, however, facing financial problems, the German government announced that it was unable to pay any more. Outraged by what it considered Germany’s violation of the peace settlement, the French government sent troops to occupy the Ruhr valley. If the Germans would not pay reparations, the French would collect reparations in kind by operating and using the Ruhr mines and factories.

Both Germany and France suffered from the French occupation of the Ruhr. The German government adopted a policy of passive resistance that was largely financed by printing more paper money, but this only intensified the inflationary pressures that had already appeared in Germany by the end of the war. The German mark soon became worthless. In 1914, a dollar was worth 4.2 marks; by November 1, 1923, the rate had reached 130 billion marks to the dollar, and by the end of November, it had snowballed to an incredible 4.2 trillion marks to the dollar. Economic disaster fueled political upheavals as Communists staged uprisings in October 1923, and Adolf Hitler’s band of Nazis attempted to seize power in Munich in November (see “Hitler and Nazi Germany” later in this chapter). But the French were hardly victorious. Their gains from the occupation were not enough to offset the costs. Meanwhile, pressure from the United States and Great Britain forced the French to agree to a new conference of experts to reassess the reparations problem. By the time the conference did its work in 1924, both France and Germany were willing to pursue a more conciliatory approach toward each other.

The Hopeful Years (1924-1929)

The formation of new governments in both Great Britain and France opened the door to conciliatory approaches to Germany and the reparations problem. At the same time, a new German government led by Gustav Stresemann (GOOS-tahf SHTRAY-zuh-mahn) (1878-1929) ended the policy of passive resistance and committed Germany to carry out most of the provisions of the Treaty of Versailles while seeking a new settlement of the reparations question. At the same time, the German government stabilized the currency and ended the extreme inflation by issuing a new temporary currency, the Rentenmark, equal to 3 trillion old marks.

In August 1924, an international commission produced a new plan for reparations. Named the Dawes Plan after the American banker who chaired the commission, it reduced reparations and stabilized Germany’s payments on the basis of its ability to pay. The Dawes Plan also granted an initial $200 million loan for German recovery, which opened the door to heavy American investments in Europe that helped usher in a new era of European prosperity between 1924 and 1929.

THE SPIRIT OF LOCARNO With prosperity came new efforts at European diplomacy. The foreign ministers of Germany and France, Gustav Stresemann and Aristide Briand (ah-ruhSTEED bree-AHNH) (1862-1932), fostered a spirit of international cooperation by concluding the Treaty of Locarno (loh-KAHR-noh) in 1925. This guaranteed Germany’s new western borders with France and Belgium. Although Germany’s new eastern borders with Poland were conspicuously absent from the agreement, a clear indication that Germany did not accept those borders as permanent, many viewed the Locarno pact as the beginning of a new era of European peace. On the day after the pact was concluded, the headline in the New York Times ran “France and Germany Ban War Forever,” and the London Times declared, “Peace at Last.”

Germany’s entry into the League of Nations in March 1926 soon reinforced the new spirit of conciliation engendered at Locarno. Two years later, similar optimistic attitudes prevailed in the Kellogg-Briand pact, drafted by the American secretary of state Frank B. Kellogg and the French foreign minister Aristide Briand. Sixty-three nations eventually agreed to the pact, in which they pledged “to renounce war as an instrument of national policy.” Nothing was said, however, about what would be done if anyone violated the treaty.

The spirit of Locarno was based on little real substance. Germany lacked the military power to alter its western borders even if it wanted to. And the issue of disarmament soon proved that even the spirit of Locarno could not induce nations to cut back on their weapons. The League of Nations Covenant had suggested the “reduction of national armaments to the lowest point consistent with national safety.” Germany, of course, had been disarmed with the expectation that other states would do likewise. Numerous disarmament conferences, however, failed to achieve anything substantial as states proved unwilling to trust their security to anyone but their own military forces.

COEXISTENCE WITH SOVIET RUSSIA One other hopeful sign in the years between 1924 and 1929 was the new coexistence of the West with Soviet Russia. By the beginning of 1924, Soviet hopes for Communist revolutions in Western states had largely dissipated. In turn, these states had realized by then that the Bolshevik regime could not be ousted. By 1924, Germany, Britain, France, and Italy, as well as several smaller European countries, had established full diplomatic relations with Soviet Russia. Nevertheless, Western powers remained highly suspicious of Soviet intentions.

The Great Depression

After World War I, most European states hoped to return to the liberal ideal of a market economy based on private enterprise and largely free of state intervention. But the war had vastly strengthened business cartels and labor unions, making some government regulation of these powerful organizations appear necessary. Then, too, the economic integration of Europe before 1914 that had been based on free trade was soon undermined by a wave of protectionism and trade barriers, and reparations and war debts further damaged the postwar international economy. Consequently, the prosperity that did occur between 1924 and 1929 was uncommonly fragile, and the dream of retuming to a self-regulating market economy was mere illusion. Then, to dash the dream altogether, along came the Great Depression.

CAUSES Two factors played an important role in bringing on the Great Depression: a downturn in domestic economies and an international financial crisis caused by the collapse of the American stock market in 1929. Already in the mid-1920s, prices for agricultural goods were beginning to decline rapidly due to overproduction of basic commodities, such as wheat.

During the war, farmers in Argentina, Australia, Canada, and the United States had expanded food production to meet the demands of the warring European nations. After the war, these farmers did not curtail production, expecting that Europe would not recover from the devastation of its fields and the loss of farmers. By 1927, however, European production returned to prewar levels, causing a sharp decline in commodity prices. Prices fell by 30 percent between 1924 and 1929. Meanwhile, an increase in the use of oil and hydroelectricity led to a slump in the coal industry even before 1929.

Furthermore, much of Europe’s prosperity between 1924 and 1929 had been built on American bank loans to Germany. Twenty-three billion new marks had been invested in German municipal bonds and German industries since 1924. Already in 1928 and 1929, American investors had begun to pull money out of Germany in order to invest in the booming New York stock market. The crash of the American stock market in October 1929 led panicky American investors to withdraw even more of their funds from Germany and other European markets. The withdrawal of funds seriously weakened the banks of Germany and other central European states. The Credit-Anstalt, Vienna’s most prestigious bank, collapsed on May 31, 1931. By that time, trade was slowing down, industrialists were cutting back production, and unemployment was increasing as the ripple effects of international bank failures had a devastating impact on domestic economies.

UNEMPLOYMENT Economic depression was by no means a new phenomenon in European history. But the depth of the economic downturn after 1929 fully justifies the “Great Depression” label. During 1932, the worst year of the depression, one British worker in four was unemployed, and 6 million Germans - 40 percent of the German labor force - were out of work. Between 1929 and 1932, industrial production plummeted almost 50 percent in the United States and nearly as much in Germany. The unemployed and homeless filled the streets of cities throughout the advanced industrial countries (see the box on p. 801).

SOCIAL AND POLITICAL REPERCUSSIONS The economic crisis also had unexpected social repercussions. Women were often able to secure low-paying jobs as servants, housecleaners, or laundresses while many men remained unemployed, either begging on the streets or staying at home to do household tasks. Many unemployed men, resenting this reversal of traditional gender roles, were open to the shrill cries of demagogues with simple solutions to the economic crisis. High unemployment rates among young males often led them to join gangs that gathered in parks or other public places, arousing fear among local residents.

Governments seemed powerless to deal with the crisis. The classical liberal remedy for depression, a deflationary policy of balanced budgets, which involved cutting costs by lowering wages and raising tariffs to exclude other countries’ goods from home markets, only served to worsen the economic crisis and create even greater mass discontent. This in turn led to serious political repercussions. Increased government activity in the economy was one reaction, even in countries like the United States that had a strong laissez-faire tradition. Another effect was a renewed interest in Marxist doctrines, since Marx had predicted that capitalism would destroy itself through overproduction. Communism took on new popularity, especially among workers and intellectuals. Finally, the Great Depression increased the attractiveness of simplistic dictatorial solutions, especially from a new movement known as fascism . Everywhere in Europe, democracy seemed on the defensive in the 1930s.

Next Reading: 26-2 Democratic States in the West