Interwar period (1918-1939)

"This is not peace; it is an armistice for twenty years".

Ferdinand Foch, Marshal of France and Commander-in-Chief of the Allied Armies during the First World War., on the Treaty of Versailles (1919)

1. Economic Changes

2. The Crash of '29 and the Great Depression

3. Causes for the Rise of Totalitarian Regimes

4. Fascism in Italy

5. German Nazism

6. The Paranoid Totalitarianism of Joseph Stalin

7. 1929-1939: The Road to Another War

Review Game and Test

1. Economic Changes After WWI

1.1. The European Crisis and the U.S. as a Creditor

Europe was left in ruins. The human cost was staggering: 17 million dead from the war, plus another 20 million from the 1918 flu pandemic. Industry was shattered, and farmland was devastated.

Germany was hit with massive war reparations— the equivalent of 31 billion euros today— owed to civilian populations, France, and England. Unable to pay, Germany saw France occupy its key industrial region, the Ruhr Valley, from 1923 to 1925. The German economy collapsed. The government printed more money, devaluing the currency and causing hyperinflation (imagine a loaf of bread costing billions of marks!).

This crisis bred deep resentment in Germany towards France and fueled a radical nationalism, creating the perfect conditions for extremist groups like the Nazis to rise.

Meanwhile, European nations were bankrupt and struggling to repay their war loans, primarily to the United States, which emerged as the world's main creditor.

Seeing Germany's collapse and its inability to pay (it finally finished paying off its reparations in 2010!), the U.S. launched the Dawes Plan (1924). This plan:

Broke Germany's payments into smaller, manageable chunks.
Provided U.S. loans to help German industry recover.The idea was a cycle: a recovered Germany could pay France and Britain, who could then pay back the U.S. This plan was working until it was derailed by the U.S. stock market crash of 1929.