CENTRAL EUROPE AND THE
MIDDLE EAST,
1920 – 1930
With the expiration of the Habsburg Empire, the successor
states of Austria, Hungary and Czechoslovakia came to be the main object of the
peace conference’s deliberations. The first two, being the main stays of the
Austro – Hungarian empire were dealt with as defeated powers.
Czechoslovakia and Yugoslavia together with Poland even
though were given benevolent treatment by the victorious powers, were however
not in themselves homogeneous entities; rather conflicting ethnic, racial,
economic, military and political divisions left these states less than stable
even with the victorious powers.
The state of Yugoslavia was only an amalgamation of Serbs,
Croats and Slovenes, while Czechoslovakia was a melting pot made up of Czechs,
Slovaks and Sudeten Germans. Poland on its own part comprised Ukrainians,
Germans, Lithuanians and Yiddish speaking Jews. Romania greatly enlarged by the
addition of Transylvania and Bessarabia, now included millions of Ukrainians,
Hungarian Jews and other minorities.
The term balkanization of Europe was drawn largely from
the many nationalities and ethnic divisions and rivalries that these new
nations came to represent. Poland even though enjoying the sympathies of the
United States and France remained agitated over the issues of an outlet to the
sea through the Port city of Danzig which incidentally consisted of 1.5 million
Kashribians and Germans.
Further north, the Baltic states of Lithuania, Latvia and
Estonia won their independence from Russia and depended largely on Britain’s
sea power to secure their freedom. However Poland and Lithuania were tangled in
a quarrel over the control of Villinius a town which according to Russia’s 1877
census figures was 40 percent Jewish, 31% Polish, 24% Russian and 2% Lithuanian.
In December 1919 the Supreme Allied council awarded the city to Lithuania.
Similarly the Czech–Polish dispute over the coal – rich
Teschen district led to recognition of the occupation claims of both powers as
they were presently standing. The German – Polish dispute over Upper Silesia
also was resolved in favor of Poland which came to win over most of the mines
to the disadvantage of Germany which had the greater ethnic nationalities
population resident there.
An Allied approved
plebiscite in 1921 showed that ethnic Germans were more outside the coal mine
district while the Poles were in the majority around the coal mines.
The treaty of st Germaine similarly disposed of the
Austrian half of the former Hapsburg monarchy in favor of Czechoslovakia while
the American President succeeded in getting the strategically important
province of Bohemia granted to Czechoslovakia with the inherent problem of 3.5
million ethnic Sudeten Germans alongside the grant of territory stretching
south to Bratislava on the Danube river but also creating a host minority of 1
million Magyars.
The settlement of Italy’s territorial claims on Austrian
land became a heated issue as the Italians insisted on the Allies fulfilling
their wartime promises which President Wilson regarded as immoral and unethical.
Before World War I began in 1914, the major European
powers included Britain, France, Italy, and the empires of Germany, Russia, and
Austria-Hungary. The Ottoman Empire also controlled territory in Europe.
His denunciation
of the Allies pact with Italy was made openly in a press conference in Paris on
April 24, 1919 in violation of the ethics of the conference; only to return
later to a compromise solution that included declaring the city of Fiume an
open city to both Italy and Austria.
Meanwhile Italy was granted Trieste, parts of Istria and
Dalmatia and the upper Adige as far as the Brenner pass with its 200,000
Germans speaking Austrians. The refusal of Wilson to concede Fiume to the
Italians led to an imbroglio that led to the collapse of the Orlando government
and the ultimate victory of Mussolini’s fascists in 1922 following Italy’s
revolt over the Allies’ volte-face on the territorial claims issue.
As for Hungary, the treaty of Trianon which was delayed
by the communist coup in Hungary until 1920 partitioned the ancient Hungarian
kingdom among neighbors. Transylvania along with its 1.3 million.... minority
was handed over to Romania; the Banat of Temesvar (Timisoara) was divided
between Romania and Yugoslavia.
Hungary’s territories thus shrank from 109, 000 to 36,000
square miles, while the post war armies of Austria and Hungary were limited to
35,000 men each. The treaty of Neville with Bulgaria saw Bulgaria losing its
western territories to the kingdom of Serbs, Croats and Slovenes and nearly all
of Western Thrace to Greece cutting the Bulgarians off from the Aegean Sea.
Their armed forces were limited to 20,000 men for
Austria, Bulgaria and Hungary even though the reparations payment was
eventually called off for obvious reasons of economic weakness. The treaty
settlement in East Europe was a fair attempt to implement the principles of
self – determination in an area where the conditions were completely
unfavorable to its policies.
The issues of
dissatisfied and dislocated minorities, inadequate finances, lack of an
existing democratic culture, equipping of a functional government, army, police
and institutions of government all combined to make these newly formed
countries unstable and potential breeding grounds for dissent and crises in the
midst of the suppressed nationalistic aspiration of a defeated Germany and a
comatose Russia.
Austria with its population nearly all German was
forbidden by the terms of the treaty from seeking union with Germany.
MIDDLE EAST AND EUROPE, 1920
The Ottoman Empire was likewise dismantled by the treaty
of Sevres. The political aims of Great Britain and France were largely achieved,
as president Woodrow Wilson felt less inclined to interfere on behalf of Arab
aspiration as he felt that the Arab world was not yet ready for self rule. The
British and French thereby legitimized their acquisition of Ottoman Turkish
territories under League of Nations mandate.
The mandates were classed as ‘A’ for those territories
ready for independence and class ‘B’ for those judged as not yet ready for
independence. Britain thereby obtained Iraq, Transjordan and Palestine under
class ‘A’ while France obtained Syria and Lebanon.
Class ‘B’ territories were Tanganyika to Britain, Cameroon
and Togo land divided between Britain and France, Rwanda, Burundi to Belgium
and class ‘C’ mandates of German south west Africa (Namibia) to South Africa,
New Guinea to Australia, German Samoa to New Zealand, and the Marianas,
Marshall and Caroline Island to Japan.
In the Mediterranean area, the Allies informally conceded
that south eastern Anatolia would be a French sphere of influence while Italy
received the Dodecanese Islands and a sphere in western and southern Anatolia.
The British supplied the Greek government of Eleutherious Venizelos with funds
and Greece occupied Smyrna and its hinterlands to the surprise of the Italians
who felt that Greece was intruding into its sphere of influence.
Meanwhile Armenia was offered as mandate territory to the
US which declined, and thereafter there were talks of Armenian independence
more so because of the Christian population and the genocide inflicted on the
Christians by the Muslim Turks in course of its war with Russia.
With Russia down, the issue of the Dardanelles Strait and
Constantinople were left unresolved as the US declined intervention there. The
vacuum thus created led to a conflict between Greece which wanted to expand its
territories into the former Ottoman Turkish held lands and the new Turkish
ruler, Mustafa Kemah who commanded Turkish forces during the war.
With the imposed treaty of Sevres signed in August 1920
by the weakened Sultan, Mustafa Kemah rallied his Turkish forces against
foreign influence in Anatolia and Constantinople. British Prime Minister Lloyd
unwilling to commit British troops instead urged Greece to enforce the
Provisions of the treaty.
The Greeks thus seized the opportunity to dominate the
entire Turkish area and impose Greek rule. The ensuing Greco-Turkish war thus
started in 1920 upon the signing of the treaty. By the end of 1920, Greek
forces had moved out from Izmir, occupied the western third of Anatolia and
were threatening the Turkish capital of Ankara.
In March 1921, the British and French proposed a
settlement that was rejected by the Turks who at the same time sought to divide
the ranks of the Allies on the issues. The Turks fighting under Kemah later
renamed Ataturk, eventually turned the tide against the Greeks .In August 1921
Turkey signed a treaty of friendship with the new U.S.S.R regulating the border
between them and ending the hopes of the newly declared independence of Armenia
and Tran Caucasian Republics.
An Allied approach
to Ataturk was rebuffed in March 1922, and he instead launched a fresh offensive
on the Greeks who withdrew hastily and in panic from Izmir which the Turks re –
possessed.
The Turks now turned on the Allied position on canal
kalong on the Dardanelles Strait leading to the withdrawal of French and
Italian forces while the British prepared to open hostilities against the Turks
who eventually relented and the fighting was brought to an end in the truce of
Mudanya (October 11 1922).
Eight days later
Lloyd George resigned his premiership and a new peace conference produced the
treaty of Lausanne (July 24th 1923), which returned Eastern Thrace
to Turkey and recognized the Nationalist government in return for the
demilitarization of the Straits. The success of the Turkish revolt inspired
other Arab elements on the same course of action.
THE ROAD TO WAR 1929 – 39; THE
REMAKING OF EUROPE
The 1930s was a decade of unrelenting crises and events
that eventually festered into a total, Second World War. The pace of events was
fast – paced, rapid and in quick succession. The treaties and structures put in
place in 1919 all gave way to the shock waves of the Great Depression,
political instability and ideological struggles that were to sweep through
Germany, Italy and eventually Japan.
The emergence of Adolf Hitler as the German Chancellor on
January 20, 1933 altered the political direction of Europe. By 1933 hardly one
stone stood on another of the economic structures raised in the 1920s. By 1935
Adolf Hitler’s Nazi regime had torn up the treaty of Versailles, and by 1936
the Locarno treaties as well.
Armed conflicts that began in Manchuria in 1931 had
spread to Abyssinia in 1935, Spain in 1936, China in 1937, Europe in 1939 and
the United States and the USSR in 1941. The collapse occurred in the context of
an economic blizzard that hemorrhaged the democracies and reinvigorated the
dictatorships.
Many citizens and intellectuals in the west lost faith in
democracy and free market economics, while widespread pacifism, isolationism
and the earnest desire to avoid the mistakes of 1914 left many of the leaders
of the Western Alliance without the will or the means to defend the 1919 order.
The combination of demoralized politicians, stricken
institutions and uninspired leadership led historian Pierre Renouin to describe
the 1930s simply as ‘la decadence’. The
militant, authoritarian states on the other hand like Italy, Japan and Germany
seemed only to wax stronger and more powerful in the wake of these crises.
To be sure and candid, no one can say as a rule that the
Depression was the reason for the rise of the Third Reich or the ideological dispositions
of the German, Italian, and Japanese governments; but it did provide the
favorable conditions for the Nazi seizure of power and implementing of extreme
measures ostensibly designed to save and perpetuate the state, as well as
Mussolini’s grand plan for the restoration of the old Roman Empire in Italy.
Hitler and Mussolini aspired to total control of their
domestic societies, in part for the purpose of girding their nations for wars
of conquest which they saw in turn as necessary for revolutionary
transformation at home.
This ideological meshing of foreign and domestic policy
rendered the fascist leaders political agenda wholly incomprehensible to the
democratic statesmen of Britain and France whose attempts to accommodate rather
than resist their regimes only made inevitable the conflicts they longed to
avoid.
THE ECONOMIC DOWNTURN, 1929-33
Banking Crisis, 1930s
By 1933 the banking
system in the United States was near collapse. Some banks had made speculative
investments in the stock market and were hurt by the crash of 1929. Others
failed when depositors, fearing that their bank would go bankrupt, rushed to
withdraw their savings. Here, depositors besiege Merchants Bank in Passaic, New
Jersey.
UPI/THE BETTMANN ARCHIVE
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rights reserved.
The great depression as it came to be known was a
phenomenon that spawned on Tuesday October 28th 1929 known as black
Tuesday when the prices of stocks on the New York stock exchange suddenly
crashed as many went to sell their stocks against a perceived crash in the
market that was rumored to happen. Wall Street prices fell sharply and the
future of many investors was irredeemably marred.
As panic spread, many went to their local banks to
retrieve their funds and this led to a rush of customers and a run on the banks
that forced many banks to shut their doors to customers and this eventually led
to a credit squeeze that shut down many business and factories.
Breadline during the
Depression
The Great Depression
forced many Americans to go hungry or depend on charities for food, clothing,
and other necessities. Here, people wait in a breadline to receive free food.
Culver Pictures
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rights reserved.
Wall Street prices fell from an index of 216 to 145 in a
month, stabilized early in 1930, then continued downwards to a bottom of 34 in
1932, industrial production fell 20 percent in 1930.
Unlike previous swings in the business cycle, this financial
panic did not follow the expected period cycle of boom and bust, but rather
defied all government and private efforts to restore prosperity for years,
until it seemed to a great many that the system itself was breaking down.
The crises led to a heated exchange across the Atlantic
as Europeans and Americans traded blames over who was responsible for the crisis.
Americans blamed the Europeans for the reparations and for pegging their currencies
too high upon the return to the gold standard and for the misuse of the America
loans of the 1920s.
The Europeans on the other hand blamed the Americans for
their insistence on the repayment of war debts, high tariffs and the unfettered
speculation leading to the stock market crash.
There is no doubt that an element of all these, contributed
to the crash. The trend of events leading to the crash had tended to suggest
that a crisis of international capital was in the offing. A sudden contraction
of international credit in June 1928 signaled the fact that international
credit was in peril.
Since the Dawes plan of 1924, Europe had depended on the
availability of American loans for capital and liquidity, but increasingly
American investors were flocking to the stock market with their savings, and
new capital issues for foreign accounts in the United States dropped 78% from
530 million dollars to 119 million dollars.
Loans to Germany
collapsed from 200 million dollars in the first half of 1928 to 77 million
dollars in the second half and 29.5 million dollars for the entire 1929.
The commodity market also forced a down turn in a market
that had been depressed for much of the decade. The Soviet government was also
complicit in the crises; in flooding the wheat market with over- supplies in
their bid to raise foreign exchange to finance the first of their five years
development plans.
The Hawley- smoothey tariff the highest in US history was
passed into law on June 17, 1930 and retaliatory measures were also passed by
the European governments; and all these helped to push down world trade from a
peak of 2.9 billion in 1929 to less than one billion dollars by 1933. The
credit squeeze, bank failures, deflation and loss of exports forced production
down and unemployment up in all industrial nations.
GNP and Income in the
Depression
During the Great
Depression, both Americans’ personal income and the gross national product (the
total output of goods and services) declined sharply. They had partially
recovered by 1939.
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All Rights Reserved.
Microsoft ® Encarta ® 2009. © 1993-2008 Microsoft Corporation. All
rights reserved.
In January 1930, the United States had over 3 million
unemployed workers and by 1932 there were more than 13 million unemployed
workers. In Britain 22% of the workforce were out of work and in Germany,
unemployment in 1932 peaked at 6 million. Altogether over 30 million people
were out of work in the industrialized nations. The depression took its toll in
Austria where the Central Bank, the Kredistanstalt was on the verge of
bankruptcy.
Unemployment During the
Depression
After the stock market
crash of 1929, unemployment in the United States soared, reaching nearly 25
percent in 1932. It remained high until World War II brought an economic
recovery.
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All Rights Reserved.
Microsoft ® Encarta ® 2009. © 1993-2008 Microsoft Corporation. All
rights reserved.
To compound matters, French objection to the formation of
a customs union between Austria and Germany in March 1931, saw a credit run on
the Austrian Central bank that almost put the bank out of business. The panic
eventually got to Germany where the Reich bank was unable to meet its
obligation under the Young plan.
President Herbert Hoover responded on June 20 1931 with a
proposal for one year moratoriums on all inter –governmental debts. Short of a
general recovery or global agreement on the restoration of trade, however the moratorium
could only be a stop gap. Instead every country sought refuge under policies of
protectionism of regional trading blocs designed to insulate each one from the
effect of the global down turn.
Herbert Hoover
Herbert Hoover had been
president for less than eight months when the stock market crashed in 1929 and
the United States faced the Great Depression. Hoover did not believe that the
government should lead the way to end the economic depression, instead wanting
to rely on private measures to solve it.
Hulton Deutsch/Courtesy
Gordon Skene Sound Collection. All rights reserved.
Microsoft ® Encarta ® 2009. © 1993-2008 Microsoft Corporation. All
rights reserved.
On September 21 1931, the Bank of England left the gold
standard and the Pound Sterling promptly lost 28% of its value, undermining
financial stability in the countries of Eastern Europe and South America. In
October a national coalition government was formed in the UK to take emergency
measures.
The Ottawa imperial economic conference of 1932 gave
birth to the British commonwealth of nations and a system of imperial preferences,
bringing Britain’s eighty six years old policy of free trade to an end.
The Lausanne conference of June – July 1932 took up the
question of what should be done after the Hoover moratorium. The French at this
time realizing that German reparations payment would be impossible to fulfill,
requested a once and for all payment of 3 billion marks on Germany and even
this was never paid.
In spite of these,
the US still insisted on the payment of war debts resulting in a French default
and a strain in Franco – US relations. The League of Nations also failed to
address the issues of disarmament in the first years of the Depression.
The London naval conference of 1930 had proposed an
extension of the 1922 Washington ratios for naval tonnage, but this time France
and Italy refused to accept the inferior status assigned to them.
In land armaments, the policies of the Great Powers were
by now fixed and predictable. Britain and the United States deplored wasteful
military spending by France especially as reparations and war debts remained
unpaid. But then even Premier Herriot and foreign minister Briand were
unwilling to consider disarmament when Britain was unwilling to offer
additional security guarantees.
Fascist Italy even
though experiencing financial crises was unwilling to consider disarmament,
whilst Germany was more concerned with seeking equality of treatment with the
other great powers. It was either France must disarm or Germany must be allowed
to expand its army.
Nonetheless the league council summoned delegates from 60
countries to a grand disarmament conference at Geneva beginning in February
1932. When Germany failed to achieve its objectives in the July adjournment, it
withdrew from the negotiations.
France, Britain
and the United States devised various measures to break the deadlock including
a no – force declaration of December 11, 1932 abhorring the use of force to
resolve disputes and a five power (including Italy) promise to grant Germany equality in a system providing
security for all nations.
On the basis of
this commitments the disarmament conference resumed in February 1933. By then however Adolf Hitler was Chancellor of
the German Reich.
EUROPE AND THE
LEAGUE OF NATIONS
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