HIS 1110 Lecture Notes - Lecture 3: Dawes Plan, Volstead Act, Allied Commission

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22 Jul 2016
The New Economic World Order
The Legacy of WWI
WWI ends, everyone wants to forget the trauma and enjoy prosperity, wealth, and happiness
1920s does look prosperous, and world economy expands
-US and Japanese economic expansion (best examples)
US emerges from WWI as dominant economic power and trading partner (un-
touched by war; only involved for a short time, and rather benefited) — Japan
in similar position of minimal involvement yet tremendous gains
WWI British blockade on Germany and submarines limit trade for US and US
finds other source: Japan (British 50% exports to US drop to 30% after WWI),
and LA
Japan trade raises with US and Asian states
1913 - 1919: J exports triple and US exports double; F, B, and G exports rise
too, though less; world exports rise 66%
US (automobiles, agriculture, etc.) and Japan move into markets left behind by
previous European domination
-The dilemma of German reparations
Negatively impacts European economy after WWI
B, F, US - Allied commission tries to establish amount G owes to France and
Belgium(1919-1921) — negotiate amount (Allies want huge amounts and G is
prepared to only offer a fraction)
Germany can only pay in kind (goods, ex. coal from Ruhr) — still a tremendous
burden for G = default as missed shipment does not get to F&Belgium on time
1923: F and Belgium react by invading G and occupy Ruhr valley to extract
reparations which are due
G launches campaign of massive resistance (passive; stop working) — Hurts
G economy even more (G government begins printing more money: hyper-in-
flation; G money becomes worthless, exchange rate worse hour by hour:
RUSH + wheelbarrows of cash)
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