ECONOMIC RECOVERY AND IMPROVED RELATIONS

From 1924 onwards there was a new and more optimistic climate in Europe.

France withdrew from the Ruhr and Germany stabilised the mark and increased industrial production.

There was an inflow of USA investment into the German Economy.

Inflation was more controlled in the European nations and both the public and private sector worked together to rebuild and reinvest. This led to an increase in economic confidence and a return to the gold standard.

The Dawes plan (1924) the Locarno Treaties (1925), the Kellogg-Briand Pact and the Young Plan (1929) all helped to either promote economic recovery, improve relations or both.

FACTORS THAT REDUCED TENSIONS:

• League of Nations and diplomacy

  • negotiate peaceful resolutions to a number of border conflicts

• Economic recovery and reconstruction

  • economies of major European countries had been devastated by ww1

  • both physical damage and former markets had been lost, primarily to USA and Japan

  • high costs of sustaining military actions meant high taxation, extensive foreign borrowing and rising inflation.

  • To finance the war, countries left the gold standard

  • this meant they could print more paper money, but had the serious effect of weakening their currencies, leading to inflation.

  • Slowly the economies began to recover

  • realising that private enterprise would find it impossible to finance reconstruction, gov took the lead.

  • Both B and F appointed Ministers of Reconstruction- Louis Loucheur and Christopher Addison.

  • Their work was severely hampered by financial restraints, but gradually economic confidence was restored.

  • Members of the public provided govs w loans through purchasing bonds

  • 1925 B returns to the gold standard, F in 1926, I in 1927, and by 1928 basically all had done so.

• The role of the USA

  • Like Europe end of ww1 led to a period of high inflation and rising unemploymrnt

  • emerged as world’s leading economy bc no damage and

  • gained new markets

  • benefitted from repayment of war debts

  • economic boom - roaring twenties - rise in consumerism

  • despite isolationism- USA played a major role in easing tensions

  • vast financial resources would overcome prob of German relations, and in doing so, lead to an improvement of relations between F and G

AIMS AND IMPACT OF INTERNATIONAL TREATIES AND CONFERENCES

By 1924, it had become more important than ever to find a solution to the problem of German reparations. There were three main issues:

• French and Belgian troops were occupying German territory, effectively an act of war, which posed a clear threat to peace in Europe

• Germany claimed that it was unable to make the reparation payments as required under the terms of the tov

• the USA continued to insist on full repayment of the loans it made to its allies during ww1, B and F argued that they could only afford to repay these debts if they received reps from G.

In order to address these problems, a conference was held in London during 1924. Chaired by the American Banker Charles Dawes, the conference was attended by representatives from the USA, B, F, I and Belgium. What emerged from this conference is known as the Dawes Plan, which had four main elements:

• It was agreed that French and Belgian troops should withdraw from the Ruhr as quickly as possible that the region should be returned to full German control.

• Germany’s reparation payments were restructured although no reduction was made to the total amount Germany would have to pay in reps, it was agreed that its annual payments would be restricted to what ‘she could reasonably afford’

• it was agreed that Germany’s national bank, the Reichsbank, should be restructured and supervised by reps of the other countries attending

• Germany received a sizeable foreign loan, mainly from the USA; this was intended to stabilise the Germany economy so that G would be in a better position to meet its rep requirements in the future.

Assured, they would continue to receive reps, F and Bel withdrew from the Ruhr, and tensions were reduced.

The Dawes Plan seemed to mark a sig change in French policy towards G. Previously, G had adopted a hard line attitude, insisting that G paid reps on time and in full. This new French willingness to compromise opened the way for further negotiations designed to reduce tensions between F and G, thereby enhancing stability in Europe.

LOCARNO CONFERENCE (1925)

The resort of Locarno in Switzerland was the setting for a series of agreements designed to create greater security and stability in Europe. Most significant outcome was that Germany, France and Belgium agreed to respect their joint frontiers. This meant the borders agreed at the ppc were jointly confirmed and accepted. No military action could be taken unless it was considered defensive.

In addition to this, a Treaty of Mutual Guarantee was agreed. This stated that B and I would come to the assistance of any country that fell victim to an act of aggression in violation of the Locarno Treaties. B thus pledged to come to F’s aid in the event of a future German attack- an agreement that finally gave the French the security they had desired for so long.

Mussolini’s aggressive actions in Fiume and Corfu during 1923 had caused concern across Europe. At Locarno, Mussolini adopted a more cautious and diplomatic approach, forging effective working relationships with representatives from Britain, France, Germany, and Belgium. Despite his ambitious foreign policy aims, M was well aware that the I of the 1920s was in no position, economically or militarily, to challenge the major Euro powers of B and F. He also realised, as the only fascist nation and with a rep for aggressive foreign policy, I was in danger of becoming isolated. Being an isolated nation in the 1920s meant being vulnerable. M played an important role in securing the agreements reached at Locarno, gaining a rep for being a statesman with whom other Euro nations could safely negotiate. This was a sign that I was being accepted by the other leading euro nations as a major power in its own right. If not yet either ‘great’ or ‘feared’, at least I was ‘respected’.

The original idea holding the LC came from Gustav Stresemann, the G foreign minister who wanted to restore German prestige and privileges as a leading Euro nation. To achieve this, he was willing to accepting G’s losses in the tov.

The LC seemed to mark a major turning point in int. affairs, symbolised by an effective working relationship which had developed between Aristide Briand, the F foreign minister, and Gustav Stresemann. To emphasise Germany’s good intentions towards F, Stresemann also accepted the permanent loss of Alsace Lorraine, Eupen and Malmédy. In doing so, he hoped to win assurances from G’s former enemies that there would are no further incursions such as the invasion of the ruhr. also allowed G to be accepted as a lon member in 1926.

The treaties were greeted with relief and enthusiasm across Europe, Lord Balfour, the former b pm, even claiming “the great war ended in 1918. The Great peace did not begin until 1925’.

However, some historians have nrrn more critical pointing out that the Locarno Treaties gave no guarantees regarding g’s borders with Poland and czechoslovakia. Moreover, it was clear that B was not fully committed to taking military action to enforce the agreements made at Locarno- B’s responsibilities were limited by clauses requiring aggrieved nations to make an initial appeal to the lon.

That the French were, perhaps, less sincere than they seemed to be in forging better relations with Germany is sometimes implied by cartoons and historians.

THE KELLOGG-BRIAND PACT (1928-29)

That the French still felt insecure despite the agreements reached at LC is clear from yhr fact that in 1927, Briand proposed a pact between F and the USA to outlaw war between them. US President Calvin Coolidge and Secretary of State Frank Kellogg were initially opposed to the idea, concerned that such an arrangement might face the USA to intervene in the event of France being threatened in the future. They suggested that the fact be extended to all countries wishing to become involved.

The result was the Kellogg Briand pact of 1928, which was subsequently signed by over 60 nations, inc. the USA, B, the USSR, G, I and J. It officially came into effect on 234 July 1929, and technically still exists today, with the most recent signatory being Barbados in 1971. By signing the pact, countries agreed to renounce war and settle disputes by peaceful means. For F, the pact appeared to provide protection from any future G aggression. For G, the USSR and J, it offered int. recognition and equal and trustworthy partners. B interpreted the pact as another means, outside the lon, to preserve int. peace and stability.

However, the pact contained to indication of what steps might be taken against any country that subsequently broke the agreement, and this lack of clarity ultimately made it worthless. USA only signed go the understanding that it retained the right to self-defence, and would not be required to take action against any nation breaking the agreement. Retaining its isolationist policy, the USA was not making any formal commitment by signing the pact.

THE YOUNG PLAN (1929)

the USA knew that despite the Dawes plan, once G had to pay its full annual rep requirements, it would no longer be able to afford its interest payments on American loans. As a result, a committee chaired by the America Banker Owen Young met to discuss the possibility of reducing the total figure that had been agreed for reps in the aftermath of the peace talks.

negotiations were not easy, especially bc G added new demands, e.g return of Polish corridor and Upper silesia. The final out come was reps down to 2 billion pounds. Basically admitting reps were too high and unrealistic. Int. controls over G eco which had been established by Dawes plan were dismantled. these were significant steps for G.

The Young Plan was probably the best example of France’s apparent new willingness to compromise. Previously (genoa conf.) France had steadfastly refused to agree too any reductions in rep payments. By 1929, the French appreciated that continuing to insist of full reps would leave f isolated and less secure. Moreover, both B and F realised that G’s ability to pay any reps at all was heavily reliant on USA loans; so had no choice but yo agree with us backed YP.

Great progress in reducing int. tensions were made in 1923-29. lon had proved effective in sorting a number of border disputes, F had adopted a less hard line approach to G, even accepting less reps, G had formally accepted the tov terms. LC seemed to symbolise a new era of friendly relations within europe. All major powers, inc. USA (who didnt lon) had renounced war by signing the Kellogg Briand Pact.

Tensions remained however. F still held deep distrust of G, acceptance of YP mainly being bc int. pressure. Neither LC or KBP contained any formal guarantees that countries would take action to enforce their terms.

CHANGING RELATIONS BETWEEN MAJOR POWERS

As a result of the agreements reached in the period from 1924 to 1929, relations between the major powers were significantly improved. However, it is clear that underlying tensions remained.

FRANCE

After the summer of 1924, by which time it was clear that the Ruhr occupation had failed in its purpose and damaged its relations with Britain, France began to

adopt a more conciliatory approach towards Germany accepting that it was unrealistic to expect Germany to pay its reparations payments, France agreed to the Dawes Plan as a suitable compromise. Relations between France and Germany significantly improved, aided by the good working relationship that existed between the French foreign minister, Briand, and his German counterpart, Stresemann. France's new spirit of cooperation with Germany was clearly reflected in the Locarno Treaties, the Kellogg-Briand Pact and the Young Plan.

Despite this, France remained sceptical of German intentions and deeply concerned about its national security. That Britain would assist France in the event of any future German attack, in line with the assurances it made at Locarno, was far from guaranteed. In signing the Kellogg-Briand Pact, the USA was not prepared to commit itself to taking action against any country in breach of its terms. As a result, the French continued to feel vulnerable.

In an attempt to gain greater security, France began developing a series of alliances with states in Eastern Europe, including Poland (1921), Czechoslovakia (1924), Romania (1926) and Yugoslavia (1927). This network of alliances became known as the 'Little Entente'. France also strongly encouraged the development of an effective League of Nations. In truth, neither of these strategies proved particularly effective. France's Little Entente' partners were relatively weak and it soon became apparent that the League of Nations lacked the power to enforce its decisions on anything other than minor issues.

French relations with Russia also remained tense.

Although France restored formal diplomatic relations with Russia in 1924, it made little attempt to enhance ths relationship. France had been deeply concerned when Russia and Germany signed the Treaty of Rapallo in 1922 From the French perspective, the treaty would enhance the risk of revolution spreading from Bolshevik Russia ar assist Germany in its economic and political recovery.

French concerns were heightened in 1926 when Russia and Germany signed the Treaty of Berlin, extending the Rapallo agreement for a further five years.

BRITAIN

Britain likewise remained deeply suspicious of Russias communist government and its close relationship with Germany, Although, in 1921, Britain was one of the fist countries to establish diplomatic relations with the Bolshevik government, Its relationship with the USSR fluctuated throughout the 1920s, Fears that the USSR encouraging independence movements in British-ruled India led Britain to break off diplomatic relations with Russia in 1927. These were not restored until another trading agreement was reached in 1929.

USA

Although the USA appeared to be following a policy of isolationism, as demonstrated by its lack of interest in joining the League of Nations and lack of participation in European relations, it was impossible for it to keep out of world affairs completely and, indeed, not in its national interests to do so. As a result, American policies and actions had a profound effect on other countries and the relationships between them.

American overseas trade and foreign investment continued to grow throughout the 19205. Inevitably, the USA wanted to protect its international interests.

On occasions, this took precedence over strict adherence to isolationism.

In particular, the USA had a vested interest in encouraging the recovery of European economies. Such a recovery would ensure that the USA received repayment of war debts from its wartime European allies, and provide enhanced markets for American exports. It was for this reason that the USA provided Germany with substantial loans following the implementation of the Dawes Plan.

However, this led to the nonsensical situation whereby Germany used American loans to pay reparations to Britain, France and Italy, who then used the same money to repay their debts to the USA

The issue of German reparations had arguably been the most significant factor in causing tension in Europe prior to 1924, The Dawes Plan, backed by the USA's financial resources, had greatly eased these tensions.

French acceptance of the plan led to improved relations between France and Germany, subsequently endorsed by the agreements reached at Locarno. The USA was not represented at the Locarno Conference, but it most certainly influenced its outcome by finding a solution to the reparations problem.

GERMANY

Under Stresemann, Germany was prepared to compromise in order to ease its economic problems achieve national security and regain international recognition as a major, and trustworthy, power.

At Locarno, Stresemann formally accepted the terms of the Treaty of Versailles, in particular by recognising Germany's requirement to pay reparations and guaranteeing its borders with France and Belgium.

As a result, Germany was permitted to join the League of Nations, as a permanent member of the Council, in 1926.

USSR

The USSR remained largely isolated throughout the 1920s.

Although Britain, France and Italy had restored diplomatic relations with the USSR by 1924, thereby recognising the Bolsheviks as its legitimate government, they still feared the spread of communism. In particular, the USSR's close relations with Germany following the Treaty of Rapallo were a cause of concern across Europe. Moreover, distrust of the USSR was not confined to Europe - the USA did not establish diplomatic relations with the USSR until

1933. The Russians themselves still resented the fact that they had not been allowed to attend the Paris Peace Conference or join the League of Nations, an organisation they increasingly perceived as simply a means of preserving the international power and influence of Britain and France.