Two major and competing forces took shape following World War I. One was disillusionment as the sheer horror of the war was finally understood. The other was the tantalizing idea that society had learned from the war and could build a better tomorrow, freed from the senselessness of war, through new institutions such as the League of Nations. Or, in the case of Russia, a new society would be based on more equitable principles. The reality turned out to be far from the ideal.

The Aftermath

As World War I ended in 1918, the world moved to cope with the destruction it had wrought. Military casualties stood between nine and ten million, civilian deaths at approximately ten million, and the number of wounded above twenty-one million. Veterans had both physical and emotional wounds; some needed physical therapy, prosthetics, or vocational training for their postwar lives. The civilian toll meant families had lost not only sons, brothers, husbands, and fathers but daughters, sisters, wives, and mothers. The war also brought into question the notions of superiority that had permeated Western civilization. People wondered whether the West was declining and could no longer consider itself a moral leader in the world.

In Belgium and eastern France, the physical destruction was immense. Thousands of acres, often of prime farmland, were barren after years of artillery bombardment. Towns such as Ypres in Belgium had been shelled so heavily that many buildings had collapsed (Figure 8.3). People had to filter back to the farmlands and cities they had fled and begin to rebuild their lives. Some towns, such as Thiepval, France, had been so thoroughly destroyed that they were never rebuilt.

In the defeated countries of Germany and Austria-Hungary, economies were in free fall. Millions of men returned home to find stubborn economic instability and labor markets in transition, with factories ill-equipped to return to peacetime production. For men from Europe’s colonies, it took even longer to return home because European troops were demobilized first. Even the victorious nations faced economic problems. Britain and France had borrowed billions to finance the war and had sizable debts to repay, many to the United States. Industries across the world had to reconvert their machinery and processes to begin producing consumer items again, causing continued unemployment.

The world was still dealing with the flu pandemic of 1918–1920, closing schools and theaters and canceling public activities. People were encouraged to wear masks and limit their movement until the crisis had passed. The flu eventually infected about one-third of the world’s population, killing tens of millions, especially younger people. By early 1920, it had stopped spreading, however, and people were able to return to their pre-pandemic lives.

Political change was in the winds. The takeover of Russia in 1917 by a small but determined Bolshevik force sent shockwaves through many nations as they began to fear similar uprisings within their own borders. In the United States, a “Red Scare” was unfolding in 1919. Fear of immigrants who might be communists or socialists was expressed in the growth of nativism—the idea that the nation should be reserved for native-born people of northern European ancestry. A number of mail bombs sent to politicians, businessmen, and newspaper editors heightened public fears of anarchy, and Attorney General A. Mitchell Palmer began authorizing what were later called the Palmer Raids, targeting newspaper presses, immigrant groups, and Russian worker unions, often without proper search warrants. Supposed “radical aliens” were arrested; some were held for months without being charged, and some were deported to Russia. The Palmer Raids demonstrated the power of the government to ignore individual rights. The American Civil Liberties Union was formed in 1920 to provide legal assistance to those targeted by the raids. As the months passed with no clear threat of a communist takeover, the public increasingly viewed Palmer’s actions with suspicion, and his political career ended.

The Treaty of Versailles

In January 1919, the leaders of the major Allied powers (except Russia) met outside Paris at Versailles to negotiate the treaty formally ending the war (Figure 8.4). Committees were assigned to resolve the many issues concerning not only Europe but also the Middle East, Africa, and Asia. The conference lasted about a year. In its finished form, the Treaty of Versailles was actually a series of treaties, a “massive document that ran to 436 pages containing 433 articles organized into fifteen parts.”

President Woodrow Wilson arrived in Paris in 1919 to grand parades and a hero’s welcome. In January 1918, he had already published a plan he hoped would be the basis of the treaty—the Fourteen Points—embodying his wish to prevent future war by solving issues he believed had led to the recent conflict. Among these points were the rights of neutral nations, freedom of the seas, and the need to break up the empires that had caused the war and create new sovereign states in Europe. Wilson’s last point proposed a League of Nations where member nations could come together for mutual security and work out problems without resorting to war.

Wilson also strongly advocated self-determination, the idea that each ethnic group should have its own government. The treaty ushered in a major redrawing of Europe, and new countries flooded onto the map. Their borders were drawn by diplomats in Paris, however, and did not always reflect where people of different nationalities lived. Nor could they. In an already diverse empire such as Austria-Hungary, people of different backgrounds lived side by side, so it was no easy feat to draw a border. In some cases, the treaty grouped people in ways that may not have made sense to them. For example, the new country of Czechoslovakia was predominantly composed of Czechs and Slovaks, who did not see themselves as having similar nationalities.

Poland resurfaced after having been partitioned out of existence in the late 1700s. A new Polish nation was carved from territory on the German Empire’s eastern side and land Russia had relinquished under the 1918 Treaty of Brest-Litovsk ending its involvement in the war. The German-speaking country of Austria became an independent nation, as did Hungary. The area of the Balkans, the site of so much uncertainty and nationalism prior to the war, received a particularly unfavorable decision regarding self-determination. The Serbs, Croats, Bosnians, Montenegrins, and other Slavic groups there viewed themselves as separate nationalities, yet all were assembled in a single country, to be called Yugoslavia or “land of the Southern Slavs.” Yugoslavia was simply a diplomatic creation, and it did not survive the century (Figure 8.5).

Other provisions of the treaty were designed to weaken Germany. Great Britain and France were intent on punishing Germany for backing Austria-Hungary in 1914 and enlarging the conflict by invading Belgium and France. They did not want Germany to simply be blamed for the war; they wanted Germany to literally pay for it, so they began a painstaking financial accounting. Every destroyed house or building was assigned a monetary value. Every lost military and civilian life was assessed an amount based on what that person’s future earnings might have been. These reparations totaled over $30 billion in 1919 dollars. (For context, a loaf of bread cost about 9 cents at the time.) Wilson hoped to persuade the other Allied leaders to abandon this course but was unable to, and the treaty reflected their goal of revenge.

One of the clearest punishments the treaty inflicted on Germany was restrictions on its military capacity. The German Army was limited to 100,000 troops, the draft was ended, and the number of ships, planes, tanks, and submarines was similarly curtailed. The Allied powers hoped that limiting the might of the German Army would limit its aggressiveness. The method of enforcing these limits was not resolved in Paris, however, and it arose as a real issue in the 1930s.

Germany was also shrunk, losing 13 percent of the territory it had held in Europe before the war. The Saar region was to be administered by the League of Nations. The Rhineland in the west (the Rhine River Valley) became a demilitarized zone. Germany also lost western territory to both France (Alsace-Lorraine, previously seized by Germany) and Belgium. In the east, German lands and the port of Danzig (now Gdańsk) were given to Poland. Other lands went to Lithuania and the new country of Czechoslovakia. As a result, Germany lost about one-tenth of its population, approximately 6.5 million people. It also had to give up its colonies in Asia and Africa.

The racism of the era was apparent in what was not included in the treaty. Japan had requested a clause affirming the equality of all nations regardless of race. This proviso would have set the stage for more open migration and fairer treatment of immigrants (such as Japanese immigrants to the United States). Several powers supported its inclusion, but Australia (which allowed no non-White immigration) and then the United States stated their opposition. Wilson claimed a unanimous vote was necessary to include it, though this was not true for any other clause. In the end, the racial equality clause was absent from the final version of the treaty. As another example, when France and Britain tallied the destruction of the war, they did not include African lives lost in the fighting in Africa. The cost of the devastation there was borne solely by Africans.

It was clear that a significant period of adjustment must follow the treaty’s signing as the peoples of the new regions and their fledgling governments established themselves. There was also disappointment. For instance, in 1915, Italy had been promised territory in Dalmatia in return for joining the Allied cause but was forced to relinquish it due to Wilson’s opposition. This prompted anger in Italy and some anti-American rallies. France was annoyed that it had received only part of Germany’s African colonies of Cameroon and Togo while the rest went to Britain. Japan, besides being angered at the rejection of the racial equality clause, was disappointed that it had not been given all of Germany’s colonial holdings in Asia and the Pacific. It received only some, while others went to New Zealand and Australia. Internal ethnic issues had not been fully solved by the treaty (such as in the creation of Czechoslovakia) and could easily resurface given the chance.

The “war guilt” clause of the treaty, blaming Germany for the war, caused many problems for that country over the next decades. Its diplomats felt dishonored by being forced to agree to it, and the harsh monetary reparations left Germany unstable for several years. The government’s decision to print more money to pay these debts caused hyperinflation and made its politicians look incompetent. It was easy for rumors of conspiracy to take hold, particularly among war veterans. The “stab-in-the-back” theory, for example, claimed that German democratic politicians had betrayed the military with the 1918 cease-fire agreement. (In truth, the German military had reached its breaking point in 1918 and was not in a position to continue the war, especially given the continuous arrival of fresh U.S. troops.)

The U.S. Senate’s biggest worry about the Treaty of Versailles was that if the United States joined the League of Nations, its troops could be sent anywhere in the world, drawing the nation into foreign disputes that the Senate, then dominated by the Republican Party, wanted to avoid. Senators feared the treaty would thus cost them their constitutional power to declare war. They also objected to Britain and France’s desire to control the League. For these reasons, the United States did not approve the treaty and did not join the League of Nations. The organization’s ability to mediate and resolve international disputes was weakened by the lack of U.S. participation.

The treaty was more popular in other Allied nations. Britain generally felt it was even-handed and that the punishment of Germany was just. The British people looked forward to joining the League. The French also agreed with the penalties heaped upon Germany, though some felt they should have gone even further because France had suffered more than Britain had.

Postwar Recession and Prosperity

World War I devastated the world’s economies. Four long years of conflict and losses had disrupted the labor force across Europe, not to mention governments’ budgetary predictions. The reparations owed by Germany were the means by which Britain and France planned to deal with their own debt, but they also created an economic house of cards that could easily tumble down.

Following the war, Britain and France looked to their African colonies and to Germany’s former colonial possessions for their financial salvation. Both France and Britain focused on agricultural development. Often this meant increasing opportunities for White settlers to reap profit for both themselves and the home country while limiting opportunities for Black Africans. In the portion of Cameroon given to France to administer after the war, French officials encouraged growing coffee for export. But they also allotted licenses to grow the crop primarily to Europeans and restricted the number of acres that Black Africans could cultivate. Lack of opportunity for Black people meant that White coffee growers had a ready supply of agricultural laborers who were forced to accept low wages. Similarly, in British Tanganyika (present-day Tanzania), the right to cut and market timber was reserved for Europeans. Britain and France also invested heavily in railroad building in Africa following the war, and Britain poured funds into mining operations in Nigeria, the Gold Coast (Ghana), and South Africa.

Latin American countries saw little real economic change after the war. Many had few industries and still depended on agricultural exports for economic growth. Some faced more competition for these commodities as other regions around the world began to export increasing amounts of items such as rubber. One Latin American commodity that did see growth, particularly in Venezuela, was oil, which was becoming increasingly important in global markets. The heavily industrialized countries of South America, such as Argentina, Brazil, and Peru, provided stable but minor economic growth. They geared their manufacturing to the export market, but tariffs rates and internal changes in monetary policy during the 1920s held them back.

The United States did not suffer the physical devastation of war that the other Allies did. It emerged from the conflict in a position of economic power, a creditor nation to be repaid for its wartime loans to Britain and France. Thus, the 1920s were a decade of prosperity for the country, in which technological innovations added to the sense of affluence. Major retailers were ready to sell consumers new items like vacuum cleaners, electric ovens, and refrigerators through credit lines they paid off over time. Domestic life became significantly easier, wages increased, and unemployment was low. For U.S. citizens, the future seemed bright.

Germany and Reparations

John Maynard Keynes, the creator of Keynesian economics, was a British economist at the Paris Peace Conference in 1919. He was so unsettled by the potential financial repercussions of the treaty’s terms that he wrote a book contending the large reparations would mean economic ruin for Germany, endangering the entire European economy. His predictions were soon borne out.

Germany faced numerous problems as the 1920s began. It was not only blamed for the war, but its foreign financial assets had also been seized under the treaty, further compromising its economic power, and it had been physically diminished when many rich industrial areas were cut away from its territory. Thus, one of the immediate problems facing the new democratic Weimar Republic government was finding a way to pay the reparations.

The first payment came due in 1921, but Germany was unable to fund the full amount, and the unresolved issue about how to enforce the treaty terms resurfaced. The next year, 1922, Germany defaulted on its payments to France and Britain. In response, French and Belgian troops occupied the Ruhr Valley, the center of German iron, coal, and steel production, as a means to force repayment. The French needed the valley’s resources (especially coal). German residents of the valley resisted the occupation, and many were killed in the resulting conflict.

To reach an immediate solution, Germany began simply printing more money. But this created an inflationary cycle, and the economy soon proved incapable of keeping up with the hyperinflation that resulted. The new money was literally not worth the paper it was printed on (Figure 8.6). The government had to print ever-larger denominations of bills, and people took wheelbarrows of cash to the store to buy a loaf of bread. Holding a job seemed ludicrous when pay could not keep up with a rate of inflation that increased by the day. The entire German middle class saw their savings disappear, and with their money went their support of the government.

In 1924, the United States intervened by arranging the Dawes Plan, by which Germany’s installment payments were lowered but set to increase in the future as its economy rebounded. Foreign banks, many in the United States, also loaned Germany money to stabilize its inflationary economy. This enabled Germany to make its payments, but it also meant taking on more debt. In essence, U.S. banks were loaning money to Germany that it was using to pay Britain and France, which in turn used that money to pay back their own debts to the United States.

Reparations continued to present an extreme economic hardship for Germany. In 1929, the United States announced a new proposal. The Young Plan stretched German reparations across a fifty-nine-year payment schedule, slightly lowered the total to $29 billion, and arranged hundreds of millions of dollars’ worth of additional loans. Germany continued to make payments until 1932, when the worldwide Great Depression made it untenable to continue. Later agreements canceled more of the remaining debt, and the last payment was finally made in 2010. In all, Germany paid only about one-eighth of the total.

Poor decisions by Germany’s Weimar Republic contributed to growing public frustration with the new democratic government. Many political groups attempted to use the country’s economic problems to catapult themselves to political power. Among these was the National Socialists or Nazi Party, whose members favored a more authoritarian government. One man who joined the group in the early 1920s was Adolf Hitler (Figure 8.7).

Hitler was a veteran of the war who subscribed to the unfounded stab-in-the-back theory and had developed an abiding hatred of the Treaty of Versailles. He became a persuasive orator in the 1920s and rose up the ranks of the Nazis as he recruited more people to the group. In 1923, he decided to launch a takeover of the state government in Munich. The planned Beer Hall Putsch (so named because the targeted politicians were to be kidnapped at a beer hall) failed, and Hitler and many supporters were arrested. Over the next year in jail, Hitler wrote the book Mein Kampf (“My Struggle”), in which he outlined his plan for the Nazis to achieve political power and their goals for the resurgence of Germany. These goals included the uniting of German-speaking peoples under one government and an expansion eastward in search of Lebensraum or “living space.” His words found a sympathetic audience in the 1920s.