Chapter 26 - The Global Crisis

Harding Administration

• Secretary of State Hughes tried to find something that could replace the League of Nations and prevent future wars

• Washington Conference of 1921 - trying to prevent a naval armament race (US, Britain, Japan)

  • Reduce fleets and a 10 year prohibition of constructing large warships

  • Five-Power Pact - limits for total naval tonnage and a ratio of armaments

  • Nine-Power Pact - continuing Open Door policy in China

  • Four-Power Pact - US, Britain, France, and Japan would respect each other’s Pacific territories and prevent aggression

• Kellogg-Briand Pact - outlawed war as an instrument of national policy

Protecting American trade

• Needed to do something about European debt and financial structure

• Dawes Plan: American banks would provide loans to Germans to meet reparation payments and in return, Britain and France would reduce the amount of those payments

  • Only lead to a circular pattern

  • Expanding oversea loans and investments - becoming too dependent on European economies

• High tariffs - Fordney-McCumber Act —> European nations could not earn the money needed to repay their loans

• Economic expansion in Latin America

  • Roads and facilities, loans to governments

  • Similar to Europe-difficulty repaying loans to US

Hoover Administration

• World financial crisis - economic distress, threatened international agreements

  • Latin America - repair damage by not intervening in internal affairs

  • Would grant diplomatic recognition to any government in Latin America and refused US Intervention

  • Europe - prohibition on debts, did not want to cancel all European war debts to US

• Growing of Fascism(Mussolini and the Nazis)

• Japanese invasion of Manchuria

• Failure of the international system - use internationalism and enter more meaningful agreements with other nations or use nationalism and rely on themselves’

Roosevelt Administration

• Economic relations with Europe - participate in the World Economic Conference

  • Allowed gold value of money to fall so American goods could compete in markets

  • “Bombshell message” - reject agreement on currency stabilization

• Stopped the circular loans - forbade American banks to make loans to any nation in default on its debt

• Reciprocal Trade Agreement Act 1934 - lowered tariffs and other countries could also lower theirs

  • Exports increased but imports lagged - other nations unable to obtain money

• USSR - No more propaganda in the US and protect American citizens in Russia, the US would recognize the Soviet Regime

  • Failed

• Good Neighbor Policy

  • Latin America was important for trade - increased exports and imports

  • Hoover Administration: no longer used military force

  • Roosevelt creates the Good Neighbor Policy - did not use military force, used economic influence

• Isolationism - many Americans in favor of it because of the disillusionment caused by WWI

  • Investigation into the corruption of businesses and banks during WWI

  • Still, Roosevelt wanted to become part of the World Court - immediately shot down by the Senate and the people

  • Neutrality Act of 1935 - prevent the US from being dragged into possible conflict in Europe or a new World War

    • Arms ban against both victim and aggressor in military conflict

    • Cash and Carry policy - European countries could only pay in cash and must go to America to buy goods

  • Mussolini conquers Ethiopia and allies with Nazi Germany - many people did not want America to intervene

  • Asia: Japanese aggression in China —> Roosevelt “quarantine speech” saying that the aggressors should be quarantined so to prevent war

    • Bad reaction from the public

• Europe - Hitler begins to take over

  • Munich Conference - appeased Hitler and accepted the lands he took over as long as Hitler would expand no more

  • This failed - Hitler now threatens Poland and WWII begins after he invades

• Neutrality?

  • Favored the Allied nations (Britain, France, etc) - made armaments available to Europe

  • Prohibited American ships from entering war zone but did permit the sale of goods on a cash-and-carry basis

Start of WWII

• Germany invades West Europe - countries being conquered left and right

• Roosevelt now preparing against a possible invasion

  • Increased aid to allies and used 1 billion dollars to expand warplane —> made war material available to Britain

• Shift in Public opinion - Germany now posed a direct threat to the US

  • Burke-Wadsworth Act - first peacetime military draft

  • Committee to Defend America by Aiding the Allies and the Fight for Freedom Committee

  • America First Committee (against America intervention)

Abandoning Neutrality

• Britain went bankrupt and could not meet the cash-and-carry requirements

• Started the “lend-lease” - America gives weapons to England and Britain had to promise to return or pay for them

  • America would only defend transport ships in their own hemisphere (western)

• Germany invades the USSR and America extends the lend-lease to Russia—> Germany begins to target American vessels

  • US enters a naval war against Germany

• The Atlantic Charter - written by Britain and America against Nazi Germany

Asia

• Japan signs the Tripartite Pact - defensive alliance with Germany and Italy and America formally cuts off call supplies/trade to Japan

• Bombing of Pearl Harbor

  • American forces now diminished in the Pacific —> finally unified the people to join the war

  • Declaration of war