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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


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
  • 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

  • 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

 Assessment of USSR economy:  50 to 100 years behind the rest of western development and industrialization

  • Must find a way to catch up with the west and increase industrial production

 Response:  implement centralized planning

  • Politburo”  assumed responsibility for central planning
  • Implementation of totalitarianism
  • Three leading figures:  Lenin, Trotsky and Burkharin
  • Lenin:  wanted central planning of the entire economy
    1. Burkharin wanted to develop capital for industrial development through freeing agricultural markets with in kind taxes on peasantry
  • Tenth Party Congress 1921:  Lenin compromised, steered a course b/w trade union autonomy and central planning
  1. Precursor to the NEP


1921:  New Economic Policy (NEP) replaced War Communism

  • Modified capitalism in which peasants could sell some of their crops
  1. “take one step back, before moving forward”
  2. Heavy industry would remain under government control
  3. Saved the Russian economy

 1924:  Death of Lenin and the rise of Stalin

  • Stalin won struggle for power
  1. Secretary of the Party, he outmaneuvered Trotsky and Burkharin
  2. Used his position to develop extensive patronage within USSR
  3. Establishes himself as dictator of Russia

 Joseph Stalin:

  • Born in Georgia – source of an inferiority complex
  • Seminary dropout:  Marxism
  • Selected to Politburo to represent ethnic diversity
  • Made secretary general of the party
  1. Used patronage of the position to increase his power base
  2. Identified himself with Lenin (Lenin did not think highly of him)

 1927:  Peasants began to withhold crops in response to govt. taxes, hording threatened to destroy the soviet economy

  • Stalin used the crisis to seize power, eliminate opponents and  abandoned the NEP
  • Trotsky driven out of USSR and assassinated in 1940
  • Burkharin forced out of the Politburo in 1929 and executed in 1937]

 1928:  Five Year Plans

  • Stalin implements Five Year plans as an attempt to increase Soviet economic productivity (attempt to catch up with western industrialization)
  • Initially grew out of a response to the peasants unwillingness to pay taxes
  1. Centralized the economic development of USSR
  • Every industrial output was predetermined to achieve optimum growth
  1. At first massively successful
  • Rate of industrialization so rapid that Soviet cities struggled to meet the new demands of large scale urbanization
  • 300-600% growth, massive success
  1. Tremendous social costs
  • Agriculture was COLLECTIZED into communes
  • Peasants hoard food in response
  • Resulted in widespread famine and the death of roughly 5 million peasants
  • Stalin uses force to maintain control and establish totalitarianism
  • Great Purge:  1934-38
  1. Stalin attacked anyone not loyal to him
  2. 300,000 executed
  3. 7 million put into gulags


  • Militaristic / nationalistic movement, which presented a “third way” between communism and democracy.  Often described as an anti-movement (rationalism, progressivism, modernization) or as reactionary revivalist.
  • An insulting term provoked by any display of authoritarian behavior.

Characteristics                                   Fascism                                   Nazism




Extreme Nationalism



Racial Superiority Concept






Aggressive Foreign Policy




1920’s:  Rise of Communism and the emergence of the Great Depression

Communism in Russia and the growing socialist movements throughout Europe were viewed as a threat to democratic nations.

  • View the Five Year Plans as military build up to take over the west

Impact:  The western European nations will refuse to work with or trust the Soviets


Fascism in Europe

Fascism: extreme nationalistic, anti-liberal, authoritarian regime which bases its ideology in irrational rhetoric

  • Rationality of the message was less important than the passion with which it is delivered
  • Movement based in a rejection of enlightenment rationalism, modernism, liberalism, disappointed aspirations and the embracing of extreme nationalism as the solution
  • Popularity grew as fascists promised to fix people’s problems while using scapegoats to shoulder blame, protect them from the communist threat and alleviate economic problems by steering a middle course b/w socialism and capitalism
  • Movement was experienced in across Europe
  1. Named after the Fasces: the rods carried by Imperial Roman officers as symbols of power
  2. Usually incorporate some form of goon squad

 Italy: “the first fascists”

  • Poor country, felt betrayed by the Treaty of Versailles – they did not gain enough territory or war reparations
  • Universal male suffrage produced parliamentary chaos and corruption
  • Economic pressure created additional stress on the government

Benito Mussoline- Il Duce

  • Began as a socialist, abandoned in favor of extreme nationalism as the best solution to Italy’s problems
  • Fascists were mostly disillusioned war veterans and socialists
  • Attacked all elements of Italian leadership:  Socialists, Catholic Parties, Communists and big business
  • Popularity grew as he blamed others for people’s problems

March on Rome

  • 1922, Mussolini rejected a minority leadership role in the govt.
  1. Demanded that the Fascists must be in charge
  • 10/28/22 March on Rome – Fascist goon squads (Squadristi – also known as the Blackshirts) occupy Rome and demand political leadership
  • Mussolini demanded resignation of govt. and appointment by the king
  • Govt. collapsed under the pressure
  • Mussolini received the right to organized a new cabinet
  • Victor Emmanuel III gave Mussolini dictatorial powers for one year to end social unrest


  • Corporate State:  state sponsored corporations became the economic basis of Italian Fascism
  1. Authority with management instead of workers, no right to collective bargaining allowed
  • Gained control of schools and created fascist youth groups
  1. Balilla
  • 1924 Fascists achieved a majority through violence and intimidation
  1. murdered Matteotti (socialist critic) – opposition resigned in protest, Mussolini used his newly found majority to control govt. and crack down on opposistion
  • Lateran Treaty:  Mussolini negotiated independence of the Vatican


  • as domestic problems continued, Mussolini looked to create an “Italian Lake”
  • Ethiopia:  10/19/35 invaded Ethiopia and struggled to win
  • League of Nations renounced Italy
  1. Italy quit the League
  2. Served to drive a political wedge b/w Italy and the WWI allies
  3. Mussolini looked to Germany for ally
  • 1936  Rome-Berlin Axis
  • 1939  Pact of Steel, bound the Italian military to the Germans


  • Mussolini in control of government machinery, but he failed to destroy opposition and establish a police state
  • Democracy ended


Rise of Hitler / Phony War


End of WWI the Treaty of Versailles:

  • German army never defeated and never surrendered
  1. Impact:  Soldiers willing to fight again
  • Implement democratic government into Germany (Weimar Republic)
  1. Impact:  No tradition, no support from military / civilian bureaucracy
  • Imposed massive war reprobation’s on Germany
  1. Impact:  Hyperinflation (bread cost upwards of 1,000,000 marks)
  • Limitation of German sovereignty
  1. Impact:  Desire to resist and overthrow Treaty of Versailles

 Economic Peril spreads through Germany

  • Inflation:  Hyperinflation makes the German Mark worthless
  1. Impact:  War reprobation become meaningless, leads to high unemployment

Unemployment in Germany hits 33%



Leader of the National Socialist Party (Nazis)

1923-  Hitler attempted to lead a revolt, fails (Beer Hall Putsch)

  • Jailed and decided that he must come to power through legal means
  • Wrote Mein Kampf (My Struggle)

Late 20’s / early 30’s

Hitler promises to achieve “full employment” if elected

  • Popularity grew as unemployment grew
  • Nazis win the most votes in the 1933 elections
  • President Hindenberg appoints Hitler to Chancellor
  • 1934 Hindenberg dies, Hitler declares himself Fuhrer

Hitler delivers full employment through rearming the German state

  • Men join army and war goods producing industries
  • Nationalization of major industries (Volkswagen)
  • Expelled Jews and “non-Germans” from economy


  • No single cause
  • Part of Hitler’s ideological view of German Nationalism
  • Why?  The result of upbringing, general culture (Wagner), need to scapegoat (blame) someone for Germany’s problems
  1. Not rational

Political Technique of Adolph Hitler:

  • Plans and techniques were clearly explained in his book Mein Kampf:
  1. “The driving force of the most important changes in this world has been found less in scientific knowledge animating the masses but rather in a fanaticism dominating them and in a hysteria which drives them forward”  Adolph Hiter, Mein Kampf
  •  Hitler did not believe in the use of rational thought to motivate people.  Instead, Hitler believed that government should motivate people through the use of propaganda.
  1.  “All effective propaganda has to limit itself to a very few points and to use them like slogans…It has to confine itself to little and repeat this eternally.”  Adolph Hitler, Mein Kampf
  •  Hitler believed that it was fine for a political leader to lie to the people, so long as they do not get caught.  Thus, to avoid detection, political leaders must not tell lies that the people would recognize.  Hitler believed that since the people commonly tell “small lies”, the people would readily recognize any small lies told by their political leaders.   
  1. therefore political leaders should “fabricate colossal untruths and they (the people) would not believe that others could have the imprudence to distort the truth so infamously.”  Adolph Hitler, Mein Kampf

 Result:  The effectiveness of any message depended not on its truth, but only in the fanaticism and passion with which it is conveyed; any properly presented message will be accepted by the masses.

  • Hitler used these ideas to develop highly effective speeches.
  • Hitler then worked to develop the image of himself as the embodiment of the German Nation.
  • Hitler developed a political ideology based social Darwinism, a romanticized view of German history and philosophy.
  1. Built the myth of the Aryan race as superior to all others, defining the goal of the Nazi state to elevate the Aryans above all
  2. In application Hitler developed a deep seated hatred for the Communists and the Jews (who he blamed as the originators of Communism)

 Democracies in Crisis


  • Multiparty system:  developed into a prolonged stalemate in response to the challenges of the Great Depression, rise of the Soviet Union and the Rearmament of Germany
  1. Great Depression:  France failed to act, rejecting both the models of the New Deal and Nationalization of Industry
  • Responded by failing to deficit spend or devalue the Franc (national prestige)
  •  Adopt a wait and see policy – eroded support for the govt.
  1. German Rearmament forced France to do the same, but with economic realities they could not afford to rearm
  2. The rise of the Soviet Union served to increase the radicalization of French politics

 1936:  The Popular Front

  • Leon Blum’s socialist party formed a coalition government
  • Immediately faced striking workers
  1. Responded with reforms:  40 hr work week, vacation, and higher minimum wages
  2. Reforms failed to stimulate the economy
  • Popular Front’s failure to stimulate the economy eroded its support, increased the radicalization of both extremes

 Great Britain

  • 1929-1931 socialist Labor Party = Ramsay MacDonald Prime Minster
  1. Failed to deal w/ Depression
  • 1931-35 National Government:  coalition of Liberal, Conservative and Labor
  1. Took G.B. off gold standard – devalued pound – tariffs
  2. Some recovery occurred
  3. Maintained support for classical economists
  4. John Maynard Keynes:  supported government
  • British Union of Fascists (BUF)Sir Oswald Mosley
  1. Saw solutions as National Corporatism as solution
  2. Used goons, attacked British Jews
  3. Popularity fell as Economic reforms took effect, violence increased and Hitler rose

Spanish Civil War

  • 1931 Spain became a democratic republic
  • 1936 Spain elected a radical “popular front” – seized aristocratic land, strikes and attacked the church
  • Revolution:
  1. Republic supporters, socialists, communists and Popular Front supporters
  2. Nationalists, aristocracy, monarchist, church
  • Led by General Francisco Franco
  1. Quickly became an “international” event
  • Nationalists support
  1. Italy and Hitler (specialists, tanks and Condor Legion)
  • Republican support
  1. USSR and volunteers from the US
  1. 1938  USSR withdrew
  2. 1939  Madrid fell to the Nationalists, General Franco became a military dictator

 Beginning of WWII

1.  Hitler rearms and declares the Treaty of Versailles null-in-void

  • European powers fail to react, fail to rearm.


2.  Hitler develops an advantage in terms of size and technology of army

  • Massive tank development and small arms


3.  Hitler moves to rearm the Rhine Land (heavy industrial area of Germany)

  • Europe fails to challenge Hitler


4.  Anschluss:  German / Austrian unity

  • Hitler forces unity with Austria (Sound of Music)
  • Europe fails to react

5.  Czechoslovakia

  • Hitler claims that Germans are being mistreated in the Sudetenland
  • Brow beat Hacha into signing over Sudentenland
  • Munich Conference – Appeasement of Hitler
  1. Daladier (F), Chamberlain (E), Hitler (G) & Mussolini (I)
  2. Meet to decide fate of Czech. / Hitler promised no further territorial expansion
  • Hitler takes the rest of the Czechoslovakia


6.  France / England seek eastern European alliance to halt Hitler’s expansion

  • Chose Poland over Soviets
  • Soviets and Germans sign a treaty of non-aggression, secretly agree to partition Poland


7.  Germans / Russians invade and conquer Poland

  • Began WWII

 Phony War

  • Time of war when everyone is gearing up for battle, but the battle has yet to really begin.
  • Russia invades Finland, Finns fight heroically but eventually lose
  1. Out numbered 1,000,000 to 175,000
  2. Impact:  Increased western mistrust of Stalin
  • Germany invades Denmark on the way to Norway (protect iron supply)
  1. English sank several German warships, gain overwhelming advantage in terms of surface naval fleet
Subject X2: 

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