Crisis of Democracy In the West

The Western Democracies

Vocabulary

• Kellogg-Briand Pact• IRA• Maginot Line• New Deal• Disarmament• Overproduction• Margin buying

Postwar Issues

• Great Britain, France and the United States emerged as the victors from WWI

• Paris Peace Conference – Offered hope to new nations

• Staggering cost of War– Financially and in casualties

• 1920s & 1930s would see major changes politically and economically

Underlying Problems

• Jobs for returning veterans• Rebuilding war-ravaged land• Europeans had borrowed heavily to pay for

war• Russian Revolution caused fear of communist• Socialism and nationalistic political

movements• Absence of strong leadership to address issues

Pursuit of Peace

• Locarno, Switzerland – treaties signed that settled border disputes between Germany and its neighbors

• Kellogg-Brian Pact:– Renounced War as an instrument of national

policy– Disarmament – reduction of armed forces and

weapons• Shrank navy but not army!

League of Nations

• Headquartered in Geneva, Switzerland• Gave people hope but was powerless to

enforce treaties or stop aggression.• Germany and the Soviet Union join• United States does not join!• Because of its weaknesses:– Dictators rearmed their nations– Japan invaded Manchuria

Recovery and Depression

• Europe:– Returned to manufacturing and trade– Veterans gradually found jobs– Rising standard of living

• America:– Emerged as leading economic power– Controlled global network of finance and trade– American banks financed European recovery

• As long as American economy was healthy – world economy remained prosperous

A Dangerous Imbalance

• Overproduction – the production of goods exceeds the demand for them

• During WWI:– Raw materials in high demand– New farming techniques increased farm output

• After WWI:– Demand for raw materials declined – prices fell– Consumers benefitted– Suppliers suffered

A Dangerous Imbalance

• Industrial workers won higher wages, which raised the price of consumer goods.

• Non-industrial workers (farmers, miners) had lost income because of over supply.

• Demand for goods slowed but not factory output!

Crash and Collapse

• New York Stock Exchange was soaring!• Investors using margin buying– Paying part of the cost and borrowing the rest

from the broker.• 1929 brokers began to call in loans– Investors unable to pay– Began massive sell of stocks– Stock Market crash triggers the Great Depression

Crash and Collapse

• Great Depression was a global economic collapse.

• It created financial turmoil in the industrial world. – American banks stopped making loans and

demanded repayment of existing loans.

Global Impact

• Attempting to protect local industries:– American raised tariffs (taxes placed on imported

goods)– Other nations retaliated by raising theirs on

American goods.• All counties lost access to global market!?• Misery and hopelessness opened the door for

radical extremist with radical solutions!

Britain in the Postwar Era

• Britain had lost its overseas trade because of German U-boat attacks on shipping

• Britain was in debt from war costs• Factories were out dated• Great Depression intensified economic woes– Coalition government provided some relief to

Brits.

Irish Independence

• Britain had passed a ‘home-rule’ for Ireland– Postponed when war began

• Easter 1916 – militant Irish nationalist launched a revolt– Suppressed by Britain – leaders executed

• 1919 Revolution erupted lead by the Irish Republican Army (IRA)

Irish Independence

• 1922 – Agreement reached between Ireland and England

• Ireland became self-governing Irish Free State– Catholic

• Northern county of Ulster (protestant region) remained under British rule– Civil war– remained an issue for entire 20th century

Commonwealth and Empire

• 1931 –Canada, Australia, New Zealand, and South Africa– Self-governing dominions of new British

Commonwealth– Linked by economic and cultural ties

• Britain retained the rest of its colonies as a source of wealth and national pride

France Pursues Security

• France emerged from WWI as a victor, but– Northern territory devastated by war– Massive casualties – Survivors battered and insecure

• French economy revived quickly– German reparations

• Depression did not hurt France as badly– Small workshops served local regions; not tied to

global trade as much

Maginot Line

• Chief concern was to secure border with Germany

• Built massive fortifications along border as a defensive wall

Prosperity and Depression in the U.S

• Emerged from WWI in excellent shape• Relatively few causalities• Little loss of property• Led the world in industrial and agricultural

output• Helped to finance European recovery

Postwar Issues in the U.S.

• Stayed out of League of Nations– Thought involvement would lead to more war

• Sponsored the Kellogg-Briand Pact• pressed for disarmament• Reduction in German reparations• “Red Scare” (fear of Communist) led to

expulsion of foreigners and limit of European immigration.

Boom and Bust

• American prospered in 1920s– Enjoyed the benefits of capitalism

• 1929 Stock Market Crash shattered this mood of prosperity.

• President Hoover believed government shouldn’t intervene in business.– Eventually does limited measures

to solve crisis

Herbert Hoover

The New Deal

• 1932 elected Franklin Roosevelt “FDR”

• Argued government had to take an active role to solve crisis

• Introduced the New Deal – massive package of economic and social programs

Franklin Roosevelt

The New Deal

• New laws regulated the Stock Market• Protected depositors savings in the bank

(FDIC)• Government building programs created jobs• Government aid to farmers (price supports)• Social Security – ‘old-age pensions”

The New Deal

• Failed to end the Great Depression• Did ease the suffering for people• Massive expansion of the role of government• ** Great Depression is ended by WWII?

Questions to Ponder

1. What steps (4) did the major powers take to protect the peace?

2. Explain how each of the following contributed to the outbreak or spread of the Great Depression:

a) Overproductionb) Margin buyingc) High tariffs