Aftermath of World War I: Treaties, Economic Shifts & Social Change

Peace Treaties After World War I

The Treaty of Versailles forced Germany to take responsibility for the war. Germany returned Alsace and Lorraine to France and consented to the occupation of the Saarland. East Prussia was cut off by the Danzig corridor. Germany delivered its colonies, accepted the demilitarization of the Rhineland, and reduced its army and arsenals.

The Austro-Hungarian Empire dissolved, and Czechoslovakia was formed. Italy made only small territorial gains. Romania grew with territories from Hungary and Russia. Hungary and Austria were reduced to small, landlocked states. Bulgaria had to surrender its Aegean coast to Greece. The Ottoman Empire disappeared and was replaced by a republic. Its Arab territories were given as mandates.

The Balance of the Great War

World War I produced the highest mortality in any known conflict. While the victors retained and even increased their empires, the peacekeeping mission was used as a cover for colonization. It was said that this war was the suicide of Europe, unlike the U.S. or Japan. Peace was also full of errors; one reason for this failure was the weakness of the League of Nations.

Economic Transformations After the War

The war changed the way people conceived the state's role in the economy. Authorities were forced to intervene. The war led to the bankruptcy of all belligerents; the victors had contracted a great debt, mortgaged their future, and expected to amortize it through reparations. Hyperinflation during 1922-1923 destroyed the social fabric. The United States emerged as one of the world's leading economic powers, along with Argentina, Australia, and Japan. Spain, encouraged by its neutrality, experienced an industrial boom during the war.

Mass Society and its Challenges

The war demanded great efforts from the population. Governments used censorship and propaganda. The traces of feudalism were still very strong in some countries of Central and Eastern Europe.

The United States in the 1920s

During the 1920s, the United States experienced a predominantly isolationist sentiment. Domestically, strong conservatism was reflected in the rise of the Ku Klux Klan, repression of the labor movement, restriction of immigration, and the enactment of Prohibition.

The Ku Klux Klan, a racist and xenophobic organization born in the Southern United States, was infamous for its violence against African Americans.

The Great Depression

The crisis quickly spread due to bank failures that ruined companies and individuals in a chain reaction, triggering waves of panic. However, the state, influenced by liberal economists, did not intervene, hoping the market would restore the balance. Their passivity deepened the crisis, making it irremediable.

U.S. banks were creditors of Europe; their bankruptcy dragged down the European financial system. Deflation, or the drop in prices and wages, signaled very low demand. Similarly, industrial activity fell sharply. In 1932, it accounted for 52.7% of 1929 levels in the United States and 53.3% in Germany.

Unemployment figures reached record highs worldwide. This spectacular phenomenon had serious social and political repercussions.