Reluctant hegemon

HIS 187

Previously

• Economic powerhouse
• Militarily modest

Wilson’s peace formulas

• “peace without victory”
• “self-determination”
• “safe for democracy”

Fourteen points

• open covenants
• freedom of navigation and trade
• colonial adjustment
• general association of nations

the interests of the populations concerned must have equal weight with the equitable claims of the government whose title is to be determined

Woodrow Wilson, 1918

Paris Peace Conference

1918–1919

Three treaties

• Versailles (Germany)
• St. Germain (Austria)
• Trianon (Hungary)

Self-determination for some

Racial equality proposal

The equality of nations being a basic principle of the League of Nations, the High Contracting Parties agree to accord as soon as possible to all alien nationals of states, members of the League, equal and just treatment in every respect making no distinction, either in law or in fact, on account of their race or nationality.

Racial Equality Proposal, 1919

Economic consequences

depression of the standard of life. . . . Men . . . in their distress may . . . submerge civilization itself

John Maynard Keynes, 1919

Then there was John Maynard Keynes, the British Treasury representative. At the end of October, 1918, Keynes began thinking about how the effort to extract reparations from Germany might work, and what effect it would have. There was, of course, Germany’s movable wealth - its gold, for a start - but once that was taken from it, what capacity to pay remained? In “Notes on an Indemnity,” Keynes made two sets of calculations for reparations payments - one, “without crushing Germany,” and a higher one, “with crushing Germany.” His concern about “crushing Germany” derived not from his sympathy for the Germans; it appeared he had none worth noting. But Keynes was worried that crushing Germany would create two kinds of problems. 

First, it would poorly serve the Allies by preventing the Germans from paying the penalty. Left without sufficient capital to meet their own needs, the Germans would have to get that capital elsewhere. A too-large reparations tab would thus “defeat its object by leading to a condition in which the allies would have to give [Germany] a loan to save her from starvation and general anarchy.” The revised version of Keynes’s memorandum put the concept more vividly: “If Germany is to be ‘milked’, she must not first of all be ruined.”

Debate over whether Germany ruined, or allowed itself to be ruined rather than pay

Maybe even more concerning to him was what was absent from the peace. “The Treaty includes no provisions for the economic rehabilitation of Europe … or to adjust the systems of the Old World and the New.”

There will be “depression of the standard of life…. Men … in their distress may overturn the remnants of organisation, and submerge civilization itself….”

http://www.freeinfosociety.com/media.php?id=1192

League of Nations, Geneva

Annexationists, 1921

Hyperinflation, 1923

Dawes Plan, 1924

• Restructure German debt
• short-term loan to Germany
• French withdrawal from Ruhr