Years 1920

The generalized disorganization of the Twenties

Following the First World War (1914 - 1918), certain countries undergoes an immediate crisis of mode (Italy, Germany, country of the Eastern Europe), others not. From this shift and these difficulties is born an international instability which puts at evil the plans of cohesion advanced by the new organizations of peace and coordination, the such recent Société of the Nations. Against any waiting, in fact the parliamentary democracies adapt best in the years 1920. Although their traditional operation was put in sleep during the conflict, their institutional flexibility enables them to adopt a strong executive at the conclusion of the conflict, while remaining - after a fashion - anchored in a republican and democratic model. Contrary, the strong modes and the empires have more problems.

In Russia, the revolution which occurs during the war aims at founding a Dictature reversing the having classes traditional. It is thus a question of taking the opposite course to the model of liberal Démocratie. To protect itself from this reversal and the fast rise from the Extreme left, the countries geographically close to the Soviet Union plan the recourse or the assertion of the Autoritarisme, so that the victory of the Démocratie S in 1918 will be only of short duration. However, the powerful crises to come have multiple causes, which exceed the simple international political opposition.

The fatal conflict leaves a disastrous socio-economic heritage. The populations are marked by an effort of considerable war, and in same time, are destabilized by the emergence of original freedoms, the such political equal rights between the sexes and the various social classes. Especially, the international questions of repairs worry the citizens like the governments, which feel a great disappointment at the exit of the war: competitions, tensions, ruin of the worldwide economy, as many daily realities which make international cooperation a reality still-born child in the public opinions. It is true that, so of broad efforts are undertaken by the two blocks incipient - republican modes and authoritarian regimes - through in particular from many International Conferences, the different deep ones that the war exacerbated or created quickly will lead to the failure of all the negotiations. The crucial question of the Désarmement oscillates of fiasco in fiasco throughout the decade, 1933 marking the turning towards opposite dynamics: a Rearmament assumed and fast. The problem of financial and energy repairs undermines the International relations as of the exit of the war, up to 1929; the Plane Young of 1930, then the Conférence of Lausanne of 1932, which fixes “definitively” the clauses of refunding by Germany, derive from a long succession of failures since 1921. The second agreement is in addition null and void, the crisis of 1929 which has occurred. The Company of the Nations crosses the whole of these historical convolutions without affixing its mark and its dynamics there.

Socio-economic mistakes

The disorganization very clearly incarnates in the economic field, nerve of the post-war period. The worldwide economy indeed seems to be never given of the first world war. The beginning of the war, one had given up the Convertibilité gold and the recourse to the tickets had been made compulsory to prevent panic and excessive increase in the courses. But during the war, if the course remain relatively stable, the Prix increase; admittedly in a limited way, because the tradesmen feared the installation of a black-market, but sufficiently to generate a Thésaurisation coins. This whole in fact takes a determining importance once returned peace: a return to the situation of pre-war period is excluded, because there are then much more tickets in circulation than of gold, which makes the pledge impossible. Nonconvertibility is thus preserved, in the hope of a return to a traditional situation which will never return in fact. Most of the economic instability of the years 1920 finds its source in this completely new situation mixing forced courses, fast debt and intrinsic overvaluation of the currencies. The most obvious consequences and fastest are a contraction of the exchanges, accentuated by the ruins caused by the conflict, and a chronic deficit of confidence in the economy, in particular on behalf of the heads of undertakings.

With the national scales, all the belligerents in-outside the United States are involved in debt (one will note all the same a debt of the American State with respect to the American private large banks: to be creditor countries of Western Europe, the United States also had to borrow). In addition to causing opened tensions, the question of repairs, i.e. refundings, underlines the potential weakness of the economies: the machine is seized up and it is the first time that a so broad whole of country is confronted with a problem of National consumption. Indeed, to refund the debts, the States do not have other choices only to be resigned to raising funds in the form of tax S and loan S, prematurely cutting any hope of economic revival by consumption. (however, the analysis of a way out of crisis by consumption was not, at that time, commonly allowed, also the way of “the financial effort” will be T it mainly followed by the governments of all edges). Thanks to the forced courses of the tickets, which underestimate the values restored by the States with their neighbors, the refunded sums remain limited and the external deficits plunge; but this easy way, involuntary, worsens the situation of the Domestic debt: to pay concrete repairs, the rebuildings, the ambient darkness with respect to the debts and their amounts push to require some always more of the citizens, as in France within the framework of German repairs.

Obviously, to answer the massive needs for liquidities engaged in the various debts and repairs, all the States produce currency massively. This sudden rise of the fiduciary circulation generates a Inflation mechanically. To limit its effects on the nation's economies, it is decided to uncouple the indices from price of the rate of inflation: artificially maintained low, but at the same time drawn upwards by the tradesmen, the prices are disorganized completely and reflect neither the value of the courses, nor the intrinsic value of the products. Quickly, the companies do not have any more products to sell, or too expensive; the consumers exhausted their own liquidities; the grounds are given in culture: finally, a spectacular fall of the prices completes the market disruption in 1920, in the industrial sectors and agricultural. But the erratic movements of the prices do not stop there. To try to start again the economy, many European countries or South American, also touched by the way of the colonial exchanges, decide to increase the Discount rate. In other words, the Crédit is returned expensive. The principal benefit of the operation is to increase the prices of the companies and to reduce the quantity of currency in circulation, which must give again confidence with the investors and the consumers - it is indeed the case during some time. However, this precipitated behavior consolidates a new frame of mind which arises from the ambient disorganization: the monetary Handling.

The most convincing example is monetary collapse in Germany and in its satellites. The German State inaugurates the “Dévaluation of combat”, IE . handle its currency to support its Exportation S. With this intention, the mark is depreciated on several occasions, which is made possible by the set of preserved currencies floating since the abandonment of any external gold reference frame. By increasing with excess the mass of currency in circulation, Germany adapts as a practitioner a “policy of worst” which aims at making impossible any refunding towards the winners: in January 1819, 1 mark “paper” was worth 1,3 mark out of gold; in December 1921, this report/ratio was of for 46; in August 1923, of for a Trillion. This monetary implosion is thus at the same time voluntary and disastrous; it will exist in several other country, in less proportions there is true. All in all, the recourse to the handling of the currencies and the adaptation disorganized to the new economic context explain many elements intervening in the future crisis of 1929, starting point impossible to circumvent of the dark years 1930.

Political readjustments

In this context of economic racing, the the United Kingdom seeks to sit a pragmatic vision of Europe, namely that of a space of competing balance - where she would play possibly a part of referee. For this reason, the country endeavors to convince France to take part in the rectification of Germany, but essuie a Net refusal illustrated by the diplomatic failure of the Conférence of Embarrassment. In 1922 is created the Gold Exchange Standard (GES), initiative aiming at solving a general problem of Couverture gold of the currencies. Indeed, if the Franco-German couple blocks any return to balance in the middle of Europe, a broader disorder threatens: during and after the war, the American Federal fund (EDF) accumulated a very great quantity of gold compared to the European historical holders. It is a threat in what that can lead to political inflationists not volunteers in Europe, i.e. with a general Atonie of the means of transactions national and thus, international - what would finally also touch thePlain ones, in a vicious circle. To bring a solution to this problem, the GES consists of a double cover gold and dollar, the EDF playing the part of monetary referee world, and the dollar, that of Monnaie of reserve. So that the French, English currencies… are found guaranteed at the same time on the dollar and American gold. The international transactions are carried out trivialement in dollars, the national transactions in local currencies. This mechanism will last until the crisis of 1929 and will allow the return to a certain stability of the European currencies, in particular of the Mark, Germany seeing its exports facilitated beyond any hope. However, the main issue in Europe, the payment of repairs on behalf of Germany, remains.

The United States is once again the craftsmen of the German rectification. In collaboration with the Doctor Schacht, the “magician of finance”, the Americans concede important loans in Germany. To ensure them, Schacht guarantees its new currency, the Rentenmark, on the whole of the benefit of the railroad of the country, in October 1923. It is thus a question only of being able to receive the lent sums, not to import; this original solution, risked, however will function. Once returned stability, one second currency is created in August 1924, the Reichsmark, profiting from a double cover with that of the GES. In the couple américano-German, confidence was the key of the recovery, but against obvious part is the very strong dependence of the German economy vis-a-vis the dollar. That will not be without medium-term consequence. During this time, France knows two main issues on the economic plan. Initially, the country spends a money which will never be perceived with sufficient height: German repairs. In addition, the English speculate against the franc. At the end of the years 1920, Raymond Poincaré makes in kind rectify and cleanse the national currency, while making play confidence, the mechanisms of saving and the devaluation. As into Germany, the devaluation changes statute near the leading classes: of political failure, it becomes a tool - even a weapon - economic.

Thus, at the dawn of the years 1930, the apparent stability of the worldwide economy masks with difficulty many disorganizations and of national or international imbalances: strong dependence and imbalance enter the mark and the dollar, international exchanges more than modest, economic policies and social of circumstances, latent tensions and a certain spirit of revenge…

See too

Cinema

Simple: 1920s

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