01:510:102 Lecture Notes - Lecture 27: Dawes Plan, Polish Corridor, War Communism
12 May 2018
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Chapter 27 - Notes (The European search for stability, 1920-
1939)
Geographical tour:
Fall of the Eastern European Empires: Germany, Austria-Hungary and Ottoman Empire
• In reconstructing Eastern Europe the victorious powers that the principle of self-
determination would guide their work
1. Finland gained independence from Russia
2. Poland was reconstructed to weaken both Germany and Russia
3. Czechoslovakia was carved out of Austrian and German lands
4. Yugoslavia came to encompass most of the Balkan region
5. Rumanian boards increased
• Factors presenting problems to Eastern Europe: lack of industrialization, broad practice
of subsistence farming and local economies dependent upon protected markets of Pre-
WWI empires
Three points of friction in Eastern Europe:
• New states experienced internal instability due to the inclusion of rival ethnic minority
groups
• Decline of local economies as the protected markets of the Pre-WWI empires disappeared
and local merchants were isolated from trade in the west
• Boarder disputes dominated foreign policy
1. Important disputes were German and Russian claims on lost territory
Recovery:
1. Germany
• End of the war: a sense of shock prevailed, govt. accounts had been favorable until the
collapse and surrender, no actual fighting took place in Germany
1. The civilian population, domestic infrastructure and German industrial
might remained largely intact
2. Germany remained the industrial giant of Europe
3. Increased the sense that the Treaty of Versailles was unjust
• Weimar Republic was created: progressive and liberal constitution with board electoral
participation and guaranteed civil liberties
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find more resources at oneclass.com
• Newly created Eastern European states became ready made allies against the specter of
Soviet expansion
• In the west: Lost Alsace and Lorraine, forced to keep the Rhineland demilitarized,
the Saar region was put under the control of the League of Nations and all coal
production was given to France until 1935
1. Impact: Humiliation of the German people, who had no idea they were ever
losing the war
• Foreign Policy: reverse the conditions of the Treaty of Versailles
• 1922 Treaty of Rapallo, attempted to create economic cooperation between Russia and
Germany
1. Russia proved to have inadequate markets for German industry
• 1923: Gustav Stresemann advanced a reconciliatory policy with Western Europe
1. Locorno Treaties: Germany, France and Belgium agree to never again wage war
against one another
• Idealistic precursor to Kellogg-Braind Pact (1928)
1. In secret Germany began to rebuild its military in order to regain the Polish
Corridor
2. France
• Opposite of Germany; small population, weak industry, ravaged by the war … but had
the best equipped military in the world (I know Nate, it’s hard to believe and accept!)
• Saw the threat of Germany as the key to its survival
• Foreign Policy centered on the maintenance of the Versailles settlement
1. Formed the “little entente” in 1923 with Poland, Czechoslovakia, Romania and
Yugoslavia
2. Ruhr Invasion: France invaded the Ruhr region to force reprobation payments
• Fr. Lost international support, force would never be used again to enforce
the Versailles settlement
1. Built the Maginot Line
2. Formed the Kellogg-Braind Pact with the United States in 1928
Collapse of the World Economy
War Debt: Bonds, inter-government loans, and increased printing of currency
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find more resources at oneclass.com
• Impact: As bonds paid off – inflation occurred – led to a loss of wealth and destruction
of savings
1. Slowed demand for goods
• Victorious nations became dependent on reparations to pay back the U.S.
1. Germans resented reparations, chose to print marks to pay back debt
• Risked hyperinflation and the destabilization of the world economy
• Dawes Plan: U.S. would provide loans to Germany and the allies would reschedule the
payments over more time
• Trade was seen as the essential element to all nations economic recovery
1. Problem: U.S. protectionist policies prevented European access to large
U.S. markets and stable currency
2. Impact was to increase European inflation and a skyrocketing value of the U.S.
dollar
• Eventually led to the decline of U.S. / European trade (U.S. goods too
expensive)
• As trade declined U.S. / German financial institutions became
increasingly tied together
• Young Plan: revision of the Dawes Plan
• U.S. private investment dried up in 1928 as Americans speculated in the stock market
• 1929 Stock Market crash triggered the depression in Germany
1. Exasperated by the Smoot-Hawley Act of 1930
• 1932 Lausanne Conference: ended reparations + gold standard
1. Represented the death of Classical Economics
• State intervention seen as critical
Lenin to Stalin:
End of the Civil War
• War communism led to resistance of the peasantry
• Industry and agriculture production were destroyed
1. In response to War Communism peasants held back their food production
2. As agricultural production fell, so to did the industrial growth
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 27 - notes (the european search for stability, 1920- Fall of the eastern european empires: germany, austria-hungary and ottoman empire. Germany: russia proved to have inadequate markets for german industry. 1923: gustav stresemann advanced a reconciliatory policy with western europe: locorno treaties: germany, france and belgium agree to never again wage war against one another. Idealistic precursor to kellogg-braind pact (1928: in secret germany began to rebuild its military in order to regain the polish. Yugoslavia: ruhr invasion: france invaded the ruhr region to force reprobation payments, fr. Lost international support, force would never be used again to enforce the versailles settlement: built the maginot line, formed the kellogg-braind pact with the united states in 1928. War debt: bonds, inter-government loans, and increased printing of currency. End of the civil war: war communism led to resistance of the peasantry.
