The Revenge of the Great War: The Crisis of the 1930s

Two sets of international agreements during the mid-1920s, the Dawes Plan to moderate the reparations demands on Germany and the Locarno Agreements to guarantee Germany’s western orders, solved the most immediate problems created by the Great War. The agreements demonstrated what more might have been achieved if British, French, and U.S. leaders and their publics had been willing to support creating a global order to replace the nineteenth-century order destroyed by the Great War. Without U.S. leaders officially admitting it, the enormous financial gains that the United States had gained from the bloodletting in Europe were employed to shore up the world economy. Because the democratic powers failed to move forward in solving the leftover problems from the War—reparations, war debts, and disarmament—a far more lethal failure to cooperate against aggression took place. A foolish pursuit of stability through restoring the gold standard transformed the economic downturn of the Depression into the largest financial crisis in history. Nations all over the world turned away from globalization toward economic blocs. Hitler and Japanese militarists used the financial crisis to take power and unleash industrialized warfare as a way to build new empires.