Rebuilding the French economy

Austria

The new Republic of Czechoslovakia

Germany, Italy and Japan move into a
        closer relationship

The textual material on page below is drawn directly from my work A Moral History of Western Society © 2024, Volume Two, pages 136-139.

Britain would join the industrial world in the great catastrophe which fell in the West at the beginning of the 1930s ... but would fare better than many of the other nations.  At first the British financial and industrial sectors were hard hit by the panic of the capital markets ... and by the American decision to impose tariffs on non-American goods in the hope that this would protect struggling American goods against foreign products.  But this merely produced the decision of other governments to do the same, drastically restricting global markets at a time when they needed to be more open than ever in order to invite production. Britain responded by creating a protected trade region with its dominions overseas ... large enough to encourage the continuing movement of raw materials and finished products back and forth within the imperial zone.  Thus Britain and the dominions fared better than much of the rest of the world ... though Britain still had to watch government expenditures (especially such items as military men and equipment in a time of "peace").  But British industry was also modernizing and developing new lines of efficiency that would help the British economy enormously. REBUILDING THE FRENCH ECONOMY Then the Great Depression hit over the winter of 1929-1930.  At first it looked as if France might escape its grip ... but by 1931 the French economy was slipping into the Depression as well.  The next few years would be extremely tough for France economically. The Popular Front By 1934 France was being shaken by political revolts ... especially after the revelation of the Stavinsky scandal in which a number of Leftist cabinet members were found to have been involved in the massive purchase of worthless bonds.  In February of that year a massive protest over this scandal by Paris mobs – which many thought was the prelude to an attempt at a right-wing political coup – had to be dispersed by the force of arms. Order was restored to France.  However, over 200 had been killed and over two thousand badly wounded in the riot.   Consequently, Leftist suspicions of on-going Fascist plots – plus similar Right-wing suspicions of Communist plots to take over France – split the country into two political groupings whose hostility toward each other grew ever deeper ... literally immobilizing French politics at the center.  By 1935, an originally veterans organization, the Croix de Feu, had grown into a para-military organization of some 300,000 ... with characteristics similar to the Fascist organizations of Italy and Germany, giving signs of a readiness to take over the French government by storm (in the manner that Hitler had just done in Germany).   After the left-wing Socialists split from the more centrist Socialists to form the Communist Party,  the more centrist Socialists decided to enter into various governing coalitions with the French Radicals (also largely centrists), coalitions which came to be termed the "Popular Front"  Also, as Stalin eventually became more concerned about the dangers of Hitler than the dangers of Western capitalism and bourgeois democracy, the Popular Front came to include the participation of the French Communists.  In the 1936 elections the French fear of fascism was substantial enough to give the Popular Front a clear majority in Parliament and thus a Popular Front government under Léon Blum was formed (the Right received only a little over a third of the vote).   This was an extremely difficult time for Blum to be given the responsibility of leading the nation.  Employment levels in France were so low that only about a half of the French workers were employed full time.  Unemployment payments by the government had again nearly completely drained the French treasury of its gold reserves.  And workers’ strikes were breaking out all over the country.  Blum responded with legislation mandating the 40-hour work week, paid vacations, and collective bargaining ... which greatly settled the mood of the French industrial workers.  Likewise for the French farmer prices were set by government so as to set the price of the industry’s all-important wheat crop.  And a number of industries (such as the armaments industry) were nationalized ... or at least brought under strict government regulation. Unfortunately for the French economy these measures only ignited a huge French price inflation of all these regulated goods.  Wheat prices were higher ... therefore so was the price of bread for the average Frenchman.  Shortening the industrial work week forced industrialists to have to raise prices in order to draw any profit for their operations, which made French products less competitive on the open international market.  Consequently this French ‘New Deal’ failed to solve the problem of widespread unemployment, industrial bankruptcy and the devaluation of the franc.  Worse, it crippled the French armaments industry ... at a time that Germany was rapidly rearming under Hitler’s direction. Then besides the Left-Right deadlock over the basic political path the country should take in terms of domestic policy, the evolution of the larger world of European politics during the 1930s made French national politics even more difficult.  The French could not decide which rising power to the East, Nazi Germany or Communist Russia, posed the greater danger to Western, or at least French, civilization.  Along with this went wide disagreement on how to respond to Mussolini in Ethiopia and the civil war raging next door in Spain Ultimately the poor economy, and Blum's decision not to support the leftist Republicanists in the Spanish Civil War, caused the defection of the Communists – and the collapse of his government in 1937 ... though so shaky was the situation that he was returned to office in 1938 ... briefly. Then the centrist Radicals took control under Édouard Daladier and Blum’s Socialists were dropped from the cabinet.  But Daladier also had a very difficult time navigating France through the tough times of unemployment, the impact on the economy of the shortened workweek, a growing government deficit ... and a drop in French arms manufacture.  In 1938 measures were taken to allow the armaments factories to stay open six days of the week (in the hopes of answering the growing German threat) ... but this would prove to be too little too late.  Léon Blum - leader of the French SFIO (French Section of the Workers' International) and one of France's prime ministers during the French leftist "Popular Front" of 1936-1938 Édouard Daladier ... head of the French Radicals (not so "radical" really!) and French Prime Minister after the fall of the Popular Front in 1938 AUSTRIA Then with the economic crisis of the early 1930s the confusion worsened ... with a rising group of Austrian Fascists pressing for union (Anschluss) with Hitler’s Nazi Germany ... and with both the Christian Socialists and the Social Democrats fervently opposed.  Englebert Dollfuss served as the head of the Christian Social Party and became head of a coalition government in 1932 - but with such a slim majority that it made his position very shaky.  Voting irregularities in the following year caused the coalition to collapse.  But Dollfuss convinced the Austrian President, Miklas, to let him rule without parliament - as virtual dictator - pointing out the threat of a German Nazi takeover of Austria as the alternative (the Nazis were gaining popularity rapidly in Austria at this time).   However in 1934, Dollfuss was assassinated in an attempted German Nazi takeover of Austria, the "July Putsch."  His assassins were arrested and the coup was thus thwarted. Dr. Kurt von Schuschnigg took over the office of Chancellor after Dolfuss's assassination and in 1935 was able to disband the Heimwehr, a paramilitary group similar to the Nazis, in an effort to get Austria settled down.  But Schuschnigg was ultimately unable to hold back the rising Nazi spirit demanding the Anschluss with Hitler’s Germany.  Thus heading into the latter 1930s, Austria was facing a crisis it could not seem to overcome.   Engelbert Dollfuss - Chancellor (then dictator) of Austria (1932-1934) Verlag Christian Brandstätter, Vienna Austrian Chancellor Engelbert Dollfuss, who bled to death in his Vienna office, assassinated by Nazis in a (failed) attempt to overthrow the Austrian government - July 25, 1934. Kurt Schuschnigg - Chancellor of Austria (1934 - 1938).  He attempted to hold off a Nazi grab of Austria ... and called for a national plebiscite to let the Austrians choose for themselves their destiny.  But just two days before the scheduled plebiscite Hitler threatened Schuschnigg ... who then resigned (March 12, 1938). THE NEW REPUBLIC OF CZECHOSLOVAKIA But as with the rest of Europe, the Depression hit the country hard.  Friendly relations that once united the cultural subgroups making up the Republic began to turn sour.  The Slovaks and the Hungarians of the Ruthenian district in fact became increasingly bitter about the Czech domination within the Republic.  And the Germans in the Sudetenland began to take a louder interest in an escape from Czech domination and an embrace of unity with Hitler’s Germany.  Hitler would eventually play this complaint to great personal and national advantage.   Edvard Beneš - Czech President GERMANY, ITALY AND JAPAN MOVE INTO A CLOSER RELATIONSHIP Italy and Germany signed a treaty of Friendship on October 25, 1936.  Mussolini would term this the "Axis Pact" ... referring to a central line of European power running from Berlin to Rome A month later, on November 25th, Germany and Japan signed an Anti-Cominten Pact directed against Stalin's Communist expansion ... but also recognizing formally Japan's takeover of Manchukuo in Northern China.  A year later Italy would join the Pact. Go on to the next section:  Stalin's Soviet Russia   Miles H. Hodges