Economic Troubles After World War I

World War I led to a generalized economic disaster worldwide, contributing to the rise of conditions that would lead to another world war.
The focus will be on how governments intervened to solve these crises.

The Treaty of Versailles required Germany to pay substantial reparations.
Germany financed war spending through debt, expecting to annex resource-rich lands to repay it. However, Germany lost the war and was unable to pay back their debts.
The German government responded by printing more money, causing hyperinflation.

By November 1923, $1 USD could be exchanged for 4,200,000,000,000 German marks.
Example: A loaf of bread cost 160 marks in 1922 but cost 200,000,000,000 marks in 1923.
Germany owed money to Britain and France, who in turn struggled to repay their debts to the United States.
The Soviets defaulted on their war debts after the communist revolution.
Colonial governments in Africa, Asia, and Latin America suffered due to their dependence on parent countries' economies.
By 1924, the economic situation stabilized when Germany borrowed money from US banks to pay reparations, fostering rapid economic recovery.

Russia exited World War I during the Russian Revolution of 1917, which devastated its economy.
Vladimir Lenin introduced the New Economic Policy (NEP) in 1923, incorporating limited free market principles while maintaining state control over major institutions.
Limited success was achieved, but the NEP declined after Lenin's death in 1924.
Joseph Stalin then rose to power, leading to a series of five-year plans to rapidly industrialize the Soviet Union.

The five-year plans aimed to multiply Soviet industrial capacity rapidly.
Collectivization of agriculture was enacted to supply food to industrial centers.
Small, privately-owned farms were merged into large, state-owned collective farms.
The wealthy landowning class (kulaks) resisted collectivization, resulting in approximately 8,000,000 arrests, executions, or labor camp sentences.
Peasants who replaced the kulaks lacked managerial skills, leading to decreased production.

Ukraine, the most significant grain producer, was severely affected.
The harvest of 1932-1933 was half of previous years' harvests.
Grain was exported to feed urban workers, causing widespread famine in Ukraine.
Policies prohibited people from leaving their homes, resulting in millions of deaths in an event known as the Holodomor (death by hunger).

The US stock market crash of 1929 led to the Great Depression.
European economies reliant on US investment suffered, causing a worldwide economic crisis.

President Franklin D. Roosevelt introduced the New Deal, a series of government-sponsored policies.
Infrastructure projects were initiated to provide employment.
Government-sponsored retirement programs and medical insurance for the elderly and children were introduced.
World War II broke out in 1939, resolving the US economic hardships almost overnight.