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WHM > Case Study D 1914-41 > Flashcards

Case Study D 1914-41 Flashcards

1
Q

What was britains main aim post WW1? How did they seek to achieve it?

A

Wanted to reconstruct pre-1914 global order

Disruption in Europe was preventing this tf Britain becomes more involved in Europe than before

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2
Q

2 reasons Europe is in a mess post war?

A
  • 3 major powers (Russia, Austro-Hungary and Germany) are broken up/lost territory -> creation of new states that are unstable financially and politically
  • matters complicated further by war debts and reparations
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3
Q

Explain the issue of Britains finances post war?

A

Weak finances for Britain due to external debt with USA meant they couldn’t help European revival easily tf need to ask USA for help

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4
Q

Why were Britain concerned about a harsh reparations payment system for Germany?

A

Worried it may further delay European recovery

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5
Q

Explain how WW1 changes the US economy?

A

Pre 1914 they are industrially strong but financially weak (net debtor, weak banking system), due to Europe’s dependency on them during the war they lend lots of money tf are owed money tf financial system strengthens

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6
Q

Fact showing how USA’s financial system has strengthened over WW1?

A

In 1918-19 US is only major country strong enough to stay on the GS

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7
Q

What were the British views on war debts and reparations (1919-20)?

A
  • cancellation of inter-allied debt
  • continued economic co-operation between wartime allies
  • modest reparation demands on Germany
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8
Q

What were the USA views on war debts and reparations (1919-20)?

A
  • wartime debts must be honoured
  • no unilateral deals or tariff discrimination
  • no link between French and British demands for reparations from Germany and the money they owe the US (didn’t want to be dragged into European affairs)
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9
Q

2 rationale for US policy on war debts and development twice on second point?

A

1) fear linking reparations and war debts would drag them into European affairs

2) US Gov doesn’t see why US taxpayers should foot the bill for a European war:
- Britain is seen as a rich country tf should be able to pay up
- also realise Britain’s debt obligations would give them diplomatic leverage

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10
Q

Explain the US position on post war European construction? (2)

A
  • only 5% of US income comes from foreign trade in 20s tf not hugely bothered by European reconstruction
  • did see potential for future trade with Europe but felt that it was up to Europe to create the RIGHT CONDITIONS for US private investment
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11
Q

USA’s views on how Europe should encourage investment? (2)

A

Restore financial stability

Keep an ‘open door’ to trade

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12
Q

2 ways the US thought Europe could restore financial stability?

A
  • control budgets and avoid wasteful arms expenditure

- restore currencies to the GS to avoid inflation

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13
Q

What did the USA mean by keeping an ‘open door’ to trade?

A

They didn’t oppose domestic tariffs, but did oppose trade discrimination tf against closed and restricted trade blocks

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14
Q

How does Britain respond in the early 20s to US views on trade and budgets?

A

Accepts US agenda on spending in defence

Tends towards US position on trade (empire preference schemes muted in the 20s to appease US)

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15
Q

Explain why and how Britain accepts US views on spending in defence in 20s?

A
  • Britain can’t afford an arms race

- 1921 Washington Conference sees major cuts in Royal Navy tf putting Britain on par with US in warships

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16
Q

Explain in detail Britain’s plans for the Gold Standard?

A

Britain supports restoration but worries if everyone returns to GS this would strain supplies -> deflation
SOLUTION?
Britain pushes for a system whereby most countries don’t directly hold gold, instead hold key currencies like £ and $ which would be back by gold

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17
Q

Explain Britain’s (minor) success with GS system?

A

Austria and Hungary CBs are established with large British-led currency loans

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18
Q

Explain Britain’s failures with GS system? (3)

A
  • 1922 Genoa conference British plans for sterling loan to Russia are rebuffed
  • 1924 Germany returns to the GS with 3/4 of reserves in gold
  • 1926-28 France re-stabilises the franc backed fully by bullion reserves
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19
Q

What is the main problem with Britain’s GS scheme?

A

USA and other countries don’t support it

20
Q

Why do the USA not support Britain’s GS scheme? (2)

A
  • fears inflationary effects tf thinks all main currencies should have a gold basis
  • also suspects Britain is trying to channel US money via London into sterling controlled channels
21
Q

Why do other countries not support Britain’s GS scheme?

A
  • France and Germany also fearful of inflation due to inflation issues of 20s tf also want to be on GS
  • France suspects Britain is trying to use the scheme to extend British financial influence in Europe
22
Q

3 decisions on British policy 1923-25?

A
  • Britain restored GS in 1925 and focuses on full restoration of it
  • Britain agrees settlement for repaying war debt
  • Britain works with US private interests on German restabilisation with The Dawes Plan (effectively have to go with US’s view on reconstruction)
23
Q

Explain what Britain’s settlement for repaying war debt was like and why they agreed to pay it?

A

Harsh - £33-40mil per year, had to repay it cause didn’t want to lose financial credibility

24
Q

Explain European and US economic conditions 1924-28? (2)

A
  • European economy revives wrt trade and output
  • US private lending to Europe (esp. Germany) soars -> US largest lender in 20s and starting to rival Britain on stocks of overseas investment
25
Q

Explain the flow of payments that allowed economies to recover in late 20s?

A

US lends money to Germany -> improvements in Germany’s international payments tf can meet reparations to Britain and France -> Britain and France can then repay money to USA for their war debts

26
Q

Problems with US lending? (4)

A
  • more volatile than British lending (depended on domestic conditions)
  • poorly directed into government projects
  • US remains highly protectionist tf difficult for borrowers to earn dollars to pay debts by exporting to the US market
  • US’s financial power strains relations with Britain 1928-29
27
Q

Explain the political strain between Britain and USA in 1928-29?

A
  • disputes about further naval disarmament
  • disputes over access to raw materials (oil and rubber) within the British empire - the US suspected Britain would restrict production to force up prices
28
Q

Explain Britain’s fear of US financial clout in 1928-29?

A

-US holds lots of gold, Britain’s reserves are low, then a boom on Wall Street in 1928 leads to funds flowing back to the US tf straining sterling further

BRITAIN DOESN’T KNOW HOW TO RESPOND!

29
Q

Effects on US of depression 1929-32? (2)

A
  • ‘29-33 US economy declines by 28% (Britain in contrast only by 6%)
  • US lending dries up -> breakdown of international payments system
30
Q

Results of depression 1929-32? (3)

A
  • countries start to leave GS
  • countries stop paying war debts (inc. Br to US)
  • Germany stops paying reparations
31
Q

How does the depression affect US leadership? (2)

A
  • becomes more preoccupied with domestic affairs as banking system struggles and mass unemployment
  • congress prevents further lending to states that had defaulted on war debts (inc. Britain)
32
Q

How does the depression affect Europe? (3)

A
  • rising economic nationalism in Germany (authoritarian government)
  • denouncing of disarmament treaties by Germany and Japan
  • trade barriers increase
33
Q

Aftermath of depression for Britain ‘33-36?

A

Lack of global leadership and fall in global co-operation leaves Britain to pursue their imperial/protectionist strategy

34
Q

Fact showing fall in co-operation between US and Britain?

A

British exports:
7% 1910
4% 1938 (to USA)

35
Q

Fact showing British domestic recovery from 1929-37?

A

Economy grows 18% in this period vs. US and France who are same size

36
Q

How is Britain doing internationally 1932-37? (2)

A

Weak BofP

Results of imperial trading are poor

37
Q

Reasons rearmament from Britain and US starts in ‘36-39? (2)

A

Growing threats from Germany Japan and Italy

Japan invades Manchuria in ‘32

Tf 10 year rule abandoned

38
Q

Due to relations with US Britain is slow to rearm, what other attempts does it use in the 30s to create peace with Japan and Germany?

A

Tries to appease potential enemies through diplomacy and trade deals (but scope is limited since exports tended to compete with their enemies and, Britain reluctant to compromise on empire PTS and hitler not really interested in trade deals anyway)

39
Q

How does Britain try to improve its economic relations with the US in the 30s? (2)

A

1934 - blind eye is turned when US artificially devalues their currency against the £

1938 - Britain signs trade deal with US offering limited tariff concessions

40
Q

Explain 2 ways US legislation causes Britain issues as it tries to rearm?

A
  • 1935 neutrality act prohibits selling war materials goods to those in conflict (some provisions were later relaxed but congress banned lending to countries who had defaulted on war debts)
  • war materials had to be paid for in cash
41
Q

How much does Britain pledge to spend on rearmament in 1936, and what implications does this have for them?

A

£1500million

Worsens balance of payments, increases dependency on US

42
Q

Britain quickly use up their gold and $ reserves once they rearm, how is this problem solved?

A

Lend-lease programme

43
Q

Explain the US policy and view towards Britain 1939-41?

A

Strongly against imperial trading system Britain had in 30s, believed it had brought Britain huge gains but it hadn’t, tf couldn’t believe they were unable to afford to pay for US goods/repay war debts, only after 1940 did US realise Britain wasn’t as strong and did lend lease

44
Q

When did the US implement lend lease?

A

1941 when Britain were facing imminent defeat

45
Q

How did the US use lend lease to their advantage?

A

Strings attached:

Used it to conform British trade and financial policy with the US and other stuff

WHM (3 decks)

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