Period 2: The Futile Search for Stability

1. Period 2: The Futile Search for Stability

2. The League of Nations • Settled international disputes and avoided war. • The US never joined. • Known as a peace keeper without a sword. • Main problem: without the US, being part of the League of Nations weakened the organization’s effectiveness. • League members could not agree to use force against aggression.

3. France • Strongest power in European coalition. • France suffered financial problems after the war. • France didn’t feel full effects of Great Depression. • 6 cabinets formed as France faced political chaos. • 1938: The French had little confidence in their political system • French New Deal gave workers the right to collective bargaining.

4. Germany • The German government adopted a policy of passive resistance to French occupation. • The German Mark soon became worthless. • In 19147, 4.2 Marks equaled 1 US Dollar. • In August 1924, an international commission produced a new plan for reparations.

5. Great Britain • During the war, Britain lost markets to the US and Japan. • By 1929, Great Britain was facing the Great Depression. • The labor party was then formed but failed to fix the problem. • With unemployment rampant, a new government led by conservatives, claimed to bring Britain out of the depression. • John Keyes, an economist, thought that unemployment came from decline in demand rather than over production.

6. The United States • By 1933, there were more than 12 million unemployed. • Franklin D. Roosevelt believed in free enterprise. • Franklin Roosevelt pursued a policy of active government intervention in the economy known as the New Deal. • The New Deal provided reforms that prevented a social revolution in the US.

7. The Dawes Plan • Named after American banker • August, 1924 • Coordinated Germany’s annual payments with its ability to pay • Granted Germany an initial $2 million loan for German recovery • Opened the door to heavy American investment • European prosperity followed • 1924-1929: 5 years

8. Treaty of Locarno • Spirit of cooperation was fostered by foreign ministers of Germany and France. Gustav Stresemann and Aristide Briand. • 1925: They signed Treaty of Locarno. Guaranteed Germany’s new Western borders with France/Belgium. • Cooperation grew stronger when Germany joined League of Nations in 1926. • Promises not to go to war were worthless without a way to enforce these promises. Not even the spirit of Locarno could convince nations to cut back on their weapons. • Germany was forced to reduce military forces. At the time, it was thought that other states would do the same, however states were unwilling to trust their security to anyone but their own military forces.

9. The Great Depression • Causes: A series of downturns in the economies of individual nations in the second half of 1920s. Individual financial crisis involving the US stock markets. • Responses: Increased government activity in the economy. Renewed interest in Marxist doctrines. Led masses of people to follow political leaders who offered simple solutions in return for dictatorial power.