Economic Effects of the great depression

1. Economic Effects of the great depression • How did the GD affect the economic policies of different countries? • US: Tariffs (trade barriers) and the recalling of international loans. • UK and France: Imperial preference: System of commerce set up in Britain and France that levied large taxes on imports from outside of the empire and lowered taxes on imports from within the empire. Successful – by the mid 1930s over half of the UK’s exports were internal.

2. POLITICAL EFFECTS OF THE GREAT DEPRESSION • How did the GD affect the formation and policies of national governments differently? • Coalition governments: Often formed during times of national crisis, these are governments that include multiple political parties. • US: FDR’s New Deal employed a fiscal policy of deficit spending: a form of economic stimulus that occurs when a country spends more than it brings in through taxation. • FDR’s foreign policy was one of isolation, letting the UK and France take the lead in Europe. “Don’t forget that I discovered over 90% of all national deficits from 1921-39 were caused by payments from past, present, and future wars.” • UK: National Government (coalition) forms from the Labour, Liberal and Conservative parties and employs a policy of Imperial preference. Historian P.M.H. Bell argued that the British policy pushed countries outside of her empire toward Germany.The economic stress of the GD caused the UK to cut defense spending resulting in a weak military (which didn’t help prevent Italian and German aggression.) • France: Self-sufficient food production and conscription kept France relatively strong but a series of 11 coalition governments that collapse one after the other (11 in 4 years) resulted in dramatic political instability. (we will come back to Germany in the GD)

3. Mussolini & fascist italy • To what extent did Fascism influence Italian foreign policy in the 1920s?

4. Fascist Ideology • When Mussolini came to power until 1925, it was “more a political action party seeking an ideology” James B. Whisker • Fascism: • A ruling philosophy of nationalism and imperialism. • A single party state with centralized authority under a dictator. • Celebrates supremacy of the state over the individual. • Promotes authoritarianism (order and obedience) over freedom of speech. • Regulated, state-run economy over free markets. • Supports the industrialists and (supposedly) the worker. • Militarism and WAR over peace. "War alone," Mussolini argued, "brings up to its highest tension all human energy and puts the stamp of nobility upon the peoples who have the courage to meet it." • Usually involves terror, censorship, nationalism, and racism.

5. Postwar Italy • Factors: • Casualties: 600,000 • Heavy debt, inflation, unemployment • Liberal government that had ruled for 50 years incapable of dealing with the economic and social problems. • Political fragmentation – coalitions were weak. • Difficulties after the war led to violent protests by the rapidly growing socialist party, facilitating a coup led by Mussolini's Fascist Party. • Versailles: Awarded small tracts of Austrian territories from the leading Allies (US & UK), but not Dalmatia (coastal Croatia) which it had coveted. • This would push Italy more toward Germany, especially since it was discontent with the meager territorial gains offered by the Allies. As a result, Italy would become a primary partner of the Axis Powers, leading Italy into WWII on the Nazi side.

6. ITALIANS WERE BITTER - BELIEVED THAT THE TREATY BETRAYED THEM BADLY. ITALY HAD NOT BEEN GIVEN THE LAND PROMISED AT THE 1915 TREATY OF LONDON.ITALIAN NATIONALISTS BLAMED THE LIBERAL GOVERNMENT FOR ACCEPTING A "MUTILATED VICTORY" THAT FAILED TO COMPENSATE ITALY FOR ITS CASUALTIES. THEY HAD WON THE WAR BUT LOST THE PEACE.

7. Enter Mussolini • “Fascism conceives of the State as an absolute, in comparison with which all individuals or groups are relative, only to be conceived in their relation to the State.” ~Benito Mussolini • After the war he organized in Milan a combat group of ultra-nationalists called the Black Shirts. • Scoffing at death and willing to die for Mussolini, they would inscribe the motto, Me ne frego ("I don't give a damn") on the bandages of their wounds. • Groups of Black Shirts soon began to attack the offices of labor unions and socialist groups. Socialist Red Shirts responded, and street violence rose, helping to destabilize Italian politics. • Fascists were recruited from the lower and middle classes – especially WWI ex-servicemen who resented the upper classes and labor unions. • The rise of fascism was remarkable: few hundred members in 1919, 700K by 1922

8. MUSSOLINI Italian leader Benito Mussolini, like his German counterpart Adolf Hitler, was able to whip people into a frenzy of support for his cause. Here, Mussolini overlooks a crowd of tens of thousands from his balcony in Rome.

9. March on rome • In 1921 the fascist parties in Italy joined together to form the National Fascist Party. • Mussolini said this at a party conference: • "Our program is simple: we want to rule Italy." • "Either the government will be given to us or will shall seize it by marching on Rome." • The March on Rome (60,000 troops) was the means to establish Mussolini and the Fascist Party as the most important party in Italy. • Faced with no alternative and fearing civil war, King Victor Emmanuel III installed Mussolini as prime minister. • “Il Duce” The Chief set up his totalitarian regime purging all opposition.

10. Italian Foreign Policy - Desire for Empire • Pre-WWI Italy managed to take control of poor territories that were more a burden than an asset. • Took Libya from the Ottoman Empire and then took Eritrea and part of modern Somalia. • In the 1920s Italy was economically and militarily weak. Depended on Br, Fr, and the US. • M. employs a cautious and opportunist expansion policy, easily taking the Greek island of Corfu and the Yugoslavian city of Fiume from these weaker nations.

11. Italian Empire 1939

12. Italy during the Great Depression • M. increased gov’t control of the economy under the corporatist model and turned to deficit spending – successful stimulus effect overall. • Army and Navy put 1 million people to work by 1935. • Later inspires Vargas in the 1930s. • In order to survive the lack of demand (as the result of tariffs/trade barriers) from Italy’s Western trading partners, Italy turns to the East and trades with Yugo., Austria, Hungary, Bulgaria, etc. • The effect is that M. doesn’t have to worry about international sanctions turning his people against him – the GD makes it easier for him to expand territorially. • 1933 Prime Minister Mussolini appoints himself Minister of War, Air and Navy, Interior, Foreign Affairs.

13. Mussolini and Hitler • Mussolini originally saw Hitler as a junior ally - they had diplomatic tension. • June 1934 – Mussolini invited Br, Fr, and Ger to sign the Four Powers Pact with the goal of reducing the small countries power within the League. • Met Hitler in Venice and called him “a silly little monkey.” • Italian concern with Hitler’s desire to claim to Austria, specifically the German speaking area of Alto Adige. • 1934 – Leader of Austria, Dollfuss, was assassinated by Austrian Nazis. • M. used intimidation by placing troops on the Austrian-Italian border to block the Anchluss. • Stresa Front – April 1935 M. formed an alliance with Britain and France to prevent German expansion and protect Austrian sovereignty.

14. What is the message of the source?

15. Abyssinia • 1895-6 – Italy invades Abyssinia but, despite superior weapons, are defeated • This was not the first African victory over Western colonizers, but it was the first time such a military put a definitive stop to a colonizing nation's efforts. • “In an age of relentless European expansion, Ethiopia alone had successfully defended its independence.” R. Jonas • As Mussolini looks around the globe, Abyssinia is strategically located between Italian coastal territories Eritrea and Somalia. • Despite the territories lack of worth and Italy’s relative weak economic status, M.’s fascist ideology and desire for Empire lead him to act.

16. Invasion of Abyssinia • Begins with a border clash at Wal Wal, a small city on the Abyssinian side of the Italian Somaliland border. • The Wal Wal Incident results in 2 Italian and 100 Abyssinian deaths. • Italy demands an indemnity and Abyssinia appeals to the League of Nations, who later decides it was no one’s fault. • In the meantime, M. has already planned for a full-scale invasion of Abyssinia. • October 1935 – Mussolini sends 500,000 soldiers, with the latest weaponry (tanks, poison gas) against Ethiopians, many using spears. • Aerial bombing • Widespread use of poison gas • Execution of prisoners • 750,000 total Ethiopians killed • Livestock, crops & water contaminated • 10,000 Italian casualties

17. New Italian Colony formed • Emperor Haile Selassie escaped to the UK as any Abyssinian opposition is annihilated by early 1936. • “The healthiest and most vital of them assert themselves against the weakest and less well adapted through conflict; the natural evolution of nations and races takes place through conflict.” B.M. • Italy merges their three territories in the region to form Italian East Africa

18. International reaction • League of Nations condemned Italy, declaring it the aggressor nation and imposed an escalating program of sanctions, but not on oil. Also allowed them to continue to use the Suez Canal. • Britain and France did not want to threaten Italy with a war they could not afford to fight in the midst of the GD. • Many conservative citizens supported M. because he was anti-communist. • Hoare-Laval Pact: In December 1935 when Abyssinian defeat was imminent, British and French Foreign Ministers planned to place two-thirds of Abyssinia under Italy’s control and give the rest to an independent Abyssinia. • M. probably would have accepted, but the plan is leaked and Hoare is forced to resign. No one asked Selassie what he thought. • When Haile Selassie is allowed to address the League in May 1936, Italy quits the League much in the same way Japan and Germany already had. **The League is ceases to be an influential body; collective security failed as Britain and France ignored the League covenant out of self-interest.*

19. What is the message of this cartoon?

20. Effect of the Abyssinian Crisis on Italy • Diplomatically and economically isolated. • Pushed closer to central and southeastern Europe and Germany • Stresa Front collapses and Italy imagines joining their navy with Germany and challenging the UK and Fr. • Rome-Berlin Axis: 1936 agreement between Italy and Germany that outlined their mutual interests and spheres of influence. • Mussolini agrees to Anchluss • Germany is now far stronger than Italy and Italy takes the junior role.

21. Spanish Civil War • Encouraged by the League's inability to act, Mussolini gave critical military support to Spanish nationalists led by General Franco during the Spanish Civil War. • Starting in 1936, Italy sent over 50,000 troops, artillery, airplanes, and other war material in support of General Franco. • Spain also a testing ground for German blitzkrieg • After winning the civil war with military aid from Italy and Germany he dissolved the Spanish Parliament and set up a right-wing dictatorship until 1978.

22. Albania • After Hitler’s annexation of Austria and most of Czechoslovakia, M. decides to annex European territory as well. • Albania is a relatively new country that has Italy as its de-facto protectorate, and in the 1920s the Albanian president replaced the republic with a monarchy and became King Zog I. • Zog tried to push Italy out by expelling Italian advisors in the early 30s, but was forced to allow them back in. • After much diplomatic wrangling, M. lands 30K troops with air support and overwhelms the resistance. Mussolini now King of Ethiopia and Albania. The Western powers are more concerned with Hitler, the East is too weak and afraid of Italy, and the League is a joke.

23. Pact of Steel • May 22, 1939 Pact of Steel: a formal military alliance that obliged Germany and Italy to aid the other country in the event of war being declared, and to collaborate in military and wartime production. • Germany does not take Pact seriously and acts unilaterally in Poland. Italy is worried and not ready for war after conflicts in Abyssinia and Spain – Germany agrees to allow diplomatic support from Italy instead of military.