Chapter 27 – The Global Crisis – 1921-1941

1. Chapter 27 – The Global Crisis – 1921-1941 Many resources cited from: http://history.state.gov/milestones/1921-1936

2. Replacing the League of Nations • The United States agreed to a separate peace treaty with Germany. The U.S. did not join the League of Nations. • Washington Conference – 1921 • Attempt to prevent a naval arms race between Great Britain, Japan, and the United States. • 5 Power Pact • 9 Power Pact • 4 Power Pact

3. Washington Conference • Between 1921 and 1922, the world's largest naval powers gathered in Washington for a conference to discuss naval disarmament and ways to relieve growing tensions in East Asia. • In the wake of World War I, leaders in the international community sought to prevent the possibility of another war. Rising Japanese militarism and an international arms race heightened these concerns and policymakers worked to reduce the threat. Senator William E. Borah (R–Idaho) led a Congressional effort to demand that the United States engage its two principle competitors in the naval arms race, Japan and Britain, in negotiations for disarmament.

4. Washington Conference • In 1921, U.S. Secretary of State Charles Evans Hughes invited nine nations to Washington to discuss naval reductions and the situation in the Far East. Great Britain, Japan, France and Italy were invited to take part in talks on reduction of naval capacity, and Belgium, China, the Netherlands and Portugal were invited to join in discussions on the situation in the Far East. Three major treaties emerged out of the Washington Conference: the Five-Power Treaty, the Four-Power Treaty, and the Nine-Power Treaty • Charles Evans Hughes

5. Washington Conference • The treaties signed at the Washington Conference served to uphold the status quo in the Pacific: they recognized existing interests and did not make fundamental changes to them. At the same time, the United States secured agreements that reinforced its existing policy in the Pacific, including the Open Door in China and the protection of the Philippines, while limiting the scope of Japanese imperial expansion as much as possible.

6. Kellogg-Briand Pact • In the wake of World War I, U.S. officials and private citizens made significant efforts to guarantee that the nation would not be drawn into another war. Some focused on disarmament, such as the series of naval conferences that began in Washington in 1921, and some focused on cooperation with the League of Nations and the newly formed World Court. Others initiated a movement to try to outlaw war outright. • Peace advocates Nicholas Murray Butler and James T. Shotwell were part of this movement. Both men were affiliated with the Carnegie Endowment for International Peace, an organization dedicated to promoting internationalism that was established in 1910 by leading American industrialist Andrew Carnegie.

7. Kellogg-Briand Pact • With the influence and assistance of Shotwell and Butler, French Minister of Foreign Affairs Aristide Briand proposed a peace pact as a bilateral agreement between the United States and France to outlaw war between them. Particularly hard hit by World War I, France faced continuing insecurity from its German neighbor and sought alliances to shore up its defenses. Briand published an open letter in April of 1927 containing the proposal. • Though the suggestion had the enthusiastic support of some members of the American peace movement, U.S. President Calvin Coolidge and Secretary of State Frank B. Kellogg were less eager than Briand to enter into a bilateral arrangement. They worried that the agreement against war could be interpreted as a bilateral alliance and require the United States to intervene if France was ever threatened. To avoid this, they suggested that the two nations take the lead in inviting all nations to join them in outlawing war.

8. Kellogg-Briand Pact • The extension of the pact to include other nations was well-received internationally. After the severe losses of the First World War, the idea of declaring war to be illegal was immensely popular in international public opinion. Because the language of the pact established the important point that only wars of aggression – not military acts of self-defense – would be covered under the pact, many nations had no objections to signing it. • If the pact served to limit conflicts, then everyone would benefit; if it did not, there were no legal consequences. In early 1928, negotiations over the agreement expanded to include all of the initial signatories. In the final version of the pact, they agreed upon two clauses: the first outlawed war as an instrument of national policy and the second called upon signatories to settle their disputes by peaceful means.

9. Kellogg-Briand Pact • On August 27, 1928, fifteen nations signed the pact at Paris. Signatories included France, the United States, the United Kingdom, Ireland, Canada, Australia, New Zealand, South Africa, India, Belgium, Poland, Czechoslovakia, Germany, Italy and Japan. Later, an additional forty-seven nations followed suit, so the pact was eventually signed by most of the established nations in the world. • The U.S. Senate ratified the agreement by a vote of 85–1, though it did so only after making reservations to note that U.S. participation did not limit its right to self-defense or require it to act against signatories breaking the agreement.

10. The Mukden Incident of 1931 • In 1931, a dispute near the Chinese city of Mukden (Shenyang) precipitated events that led to the Japanese conquest of Manchuria. In response, U.S. Secretary of State Henry Stimson issued what would become known as the Stimson Doctrine, stating that the United States would not recognize any agreements between the Japanese and Chinese that limited free commercial intercourse in the region.

11. Invasion of Manchuria - 1931

12. The Mukden Incident of 1931 • In the 1920s and 1930s, the United States had a number of interests in the Far East. The United States engaged in trade and investment in China. American missionaries representing many denominations worked within the region. The United States also claimed Pacific territories, including the Philippines, Guam, and Hawaii. • The United States defended its interests in the region through a three-pronged Far Eastern policy: it included the principle of the Open Door for guaranteeing equal access to commercial opportunities in China, a belief in the importance of maintaining the territorial integrity of China, and a commitment to cooperation with other powers with interests in the region.

13. The Mukden Incident of 1931 • In the 1930s, events transpired that challenged all of these policies. On September 18, 1931, an explosion destroyed a section of railway track near the city of Mukden. The Japanese, who owned the railway, blamed Chinese nationalists for the incident and used the opportunity to retaliate and invade Manchuria. However, others speculated that the bomb may have been planted by mid-level officers in the Japanese army to provide a pretext for the subsequent military action. • Within a few short months, the Japanese army had overrun the region, having encountered next to no resistance from an untrained Chinese army, and it went about consolidating its control on the resource-rich area. The Japanese declared the area to be the new autonomous state of Manchukuo, though the new nation was in fact under the control of the local Japanese army.

14. U.S. Response to Japanese Invasion • The United States and other western powers were at a loss on how to respond to the rapidly developing crisis. Even as the Japanese moved far from the original site of the “attack” at Mukden to bomb the city of Jinzhou (Chinchow), there was little sense that U.S. interests in the area were anywhere near profound enough to make military intervention necessary or desirable. • Given the 1930s worldwide depression, there was little support for economic sanctions to punish the Japanese. Instead, the United States sat in on League of Nations council meetings for the first time to try to convince the League to enforce the Kellogg-Briand Pact, which both Japan and China had signed. Appeals based on the pact, however, proved ineffective.

15. Debts and Diplomacy • Europe struggles to repay U.S. loans. • 1924 – Dawes Plan • U.S. loans to Germany to be used for reparation payments  did not work • Increased interconnectedness of the economy

16. The Dawes Plan • Asecond wartime financial issue was causing tension among the former co-belligerents. While the United States had little interest in collecting reparations from Germany, it was determined to secure repayment of the more than $10 billion it had loaned to the Allies over the course of the war. Time and again, Washington rejected calls to cancel these debts in the name of the common wartime cause; it also resisted efforts to link reparations to inter-allied war debts. • In 1922, London made this link explicit in the Balfour Note, which stated that it would seek reparations and wartime debt repayments from its European allies equal to its debt to the United States. That same year, Congress created the United States War Debt Commission to negotiate repayment plans, on concessionary terms, with the 17 countries that had borrowed money from the United States.

17. The Dawes Plan • In late 1923, with the European powers stalemated over German reparations, the Reparation Commission struck a committee to review the situation. Headed by Chicago banker Charles G. Dawes, the committee presented its proposal in April 1924. Under the Dawes Plan, Germany's annual reparation payments would be reduced, increasing over time as its economy improved; the full amount to be paid, however, was left undetermined. Economic policy making in Berlin would be reorganized under foreign supervision and a new currency, the Reichsmark, adopted. • France and Belgium would evacuate the Ruhr and foreign banks would loan the German government $200 million to help encourage economic stabilization. American financier J. P. Morgan floated the loan on the U.S. market, which was quickly oversubscribed. Over the next four years, U.S. banks continued to lend Germany enough money to enable it to meet its reparation payments to countries such as France and the United Kingdom. These countries, in turn, used their reparation payments from Germany to service their war debts to the United States. • President Coolidge with Charles Dawes

18. Financial Difficulties • U.S. placed protective tariffs on products from Europe • Europe can’t export goods to the U.S.  not making enough money to pay back their loans to the United States

19. U.S. Protectionism • High tariffs were a means not only of protecting infant industries, but of generating revenue for the federal government. They were also a mainstay of the Republican Party, which dominated the Washington political scene after the Civil War. After the Democrats, who supported freer trade, captured Congress and the White House in the elections of 1910 and 1912, the stage was set for a change in tariff policy. • With the 1913 Underwood-Simmons Tariff, the United States broke with its tradition of protectionism, enacting legislation that lowered tariffs (and also instituted an income tax). The reversion of Congress to Republican control during the First World War and the 1920 election of Republican Warren Harding to the presidency signaled an end to the experiment with lower tariffs.

20. U.S. Protectionism • To provide protection for American farmers, whose wartime markets in Europe were disappearing with the recovery of European agricultural production, as well as U.S. industries that had been stimulated by the war, Congress passed the temporary Emergency Tariff Act in 1921, followed a year later by the Fordney-McCumber Tariff Act of 1922. • The Fordney-McCumber Tariff Act raised tariffs above the level set in 1913; it also authorized the president to raise or lower a given tariff rate by 50% in order to even out foreign and domestic production costs. One unintended consequence of the Fordney-McCumber tariff was that it made it more difficult for European nations to export to the United States and so earn dollars to service their war debts.

21. Smoot-Hawley Tariff • The wartime expansion of non-European agricultural production had led, with the recovery of European producers, to overproduction during the 1920s. This in turn had led to declining farm prices during the second half of the decade. During the 1928 election campaign, Republican presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. • Calls for increased protection flooded in from industrial sector special interest groups and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had produced a piece of legislation, the Tariff Act of 1930, more commonly known as the Smoot-Hawley tariff, that entrenched the protectionism of the Fordney-McCumber tariff.

22. Hoover/World Crisis • Repudiate the Roosevelt Corollary towards Latin America • Refusal to cancel war debt from Europe • Latin America goodwill tours • Failure of the system designed to protect the peace

23. Franklin D. Roosevelt • Election of 1932 • FDR deals with two major issues at the outset of his presidency • Great Depression • International tension related to issues in Europe • 1933 – World Economic Conference • 1934 – Forbid U.S. banks from making loans to any nation in default • 1934 – Reciprocal Trade Agreement – Favorable tariffs

24. Reciprocal Trade Agreement • Between 1934 and 1939, the Roosevelt Administration concluded trade agreements with 19 countries under the Reciprocal Trade Agreements Act: Belgium, Brazil, Canada, Colombia, Costa Rica, Cuba, Czechoslovakia, Ecuador, El Salvador, Finland, France, Guatemala, Haiti, Honduras, the Netherlands, Nicaragua, Sweden, Switzerland, and the United Kingdom. • After 1945, the tariff negotiating procedure established under the RTAA program provided the model for that of the General Agreement on Tariffs and Trade (GATT), the agreement signed by 23 countries in 1947 that has provided the framework for multilateral trade liberalization in the post-WWII era.

25. FDR – Foreign Policy • Good Neighbor Policy – 1933 – Latin America • Isolationism • Failure of the League • Neutrality Acts – 1935, 1936, 1937 • Spanish Civil War • Sino-Japanese War • December 12, 1937 – U.S. boat sunk by the Japanese in China

26. Good Neighbor Policy • President Franklin Delano Roosevelt took office determined to improve relations with the nations of Central and South America. Under his leadership the United States emphasized cooperation and trade rather than military force to maintain stability in the hemisphere. • In his inaugural address on March 4, 1933, Roosevelt stated: "In the field of world policy I would dedicate this nation to the policy of the good neighbor--the neighbor who resolutely respects himself and, because he does so, respects the rights of others."

28. Good Neighbor Policy • Roosevelt's Secretary of State, Cordell Hull, participated in the Montevideo Conference of December 1933, where he backed a declaration favored by most nations of the Western Hemisphere: "No state has the right to intervene in the internal or external affairs of another". In December Roosevelt stated, "The definite policy of the United States from now on is one opposed to armed intervention." In 1934 at Roosevelt's direction the 1903 treaty with Cuba (based on the Platt Amendment) that gave the United States the right to intervene to preserve internal stability or independence was abrogated. • Although domestic economic problems and World War II diverted attention from the Western Hemisphere, Roosevelt's Good Neighbor policy represented an attempt to distance the United States from earlier interventionist policies, such as the Roosevelt Corollary and military interventions in the region during the 1910s and 1920s.

29. Neutrality Acts of the 1930’s • By the mid-1930s, events in Europe and Asia indicated that a new world war might soon erupt and the U.S. Congress took action to enforce U.S. neutrality. On August 31, 1935, Congress passed the first Neutrality Act prohibiting the export of “arms, ammunition, and implements of war” from the United States to foreign nations at war and requiring arms manufacturers in the United States to apply for an export license. • American citizens traveling in war zones were also advised that they did so at their own risk. President Franklin D. Roosevelt originally opposed the legislation, but relented in the face of strong Congressional and public opinion. On February 29, 1936, Congress renewed the Act until May of 1937 and prohibited Americans from extending any loans to belligerent nations.

30. U.S. Isolation in the 1930’s

31. Neutrality Acts of the 1937 • The outbreak of the Spanish Civil War in 1936 and the rising tide of fascism in Europe increased support for extending and expanding the Neutrality Act of 1937. Under this law, U.S. citizens were forbidden from traveling on belligerent ships, and American merchant ships were prevented from transporting arms to belligerents even if those arms were produced outside of the United States. • The Act gave the President the authority to bar all belligerent ships from U.S. waters, and to extend the export embargo to any additional “articles or materials.” Finally, civil wars would also fall under the terms of the Act.

32. Neutrality Act of 1937 • The Neutrality Act of 1937 did contain one important concession to Roosevelt: belligerent nations were allowed, at the discretion of the President, to acquire any items except arms from the United States, so long as they immediately paid for such items and carried them on non-American ships—the so-called “cash-and-carry” provision. Since vital raw materials such as oil were not considered “implements of war,” the “cash-and-carry” clause would be quite valuable to whatever nation could make use of it. • Roosevelt had engineered its inclusion as a deliberate way to assist Great Britain and France in any war against the Axis Powers, since he realized that they were the only countries that had both the hard currency and ships to make use of “cash-and-carry.” Unlike the rest of the Act, which was permanent, this provision was set to expire after two years

33. Neutrality Act of 1939 • Following Germany's occupation of Czechoslovakia in March of 1939, Roosevelt suffered a humiliating defeat when Congress rebuffed his attempt to renew “cash-and-carry” and expand it to include arms sales. President Roosevelt persisted and as war spread in Europe, his chances of expanding “cash-and-carry” increased. After a fierce debate in Congress, in November of 1939, a final Neutrality Act passed. • This Act lifted the arms embargo and put all trade with belligerent nations under the terms of “cash-and-carry.” The ban on loans remained in effect, and American ships were barred from transporting goods to belligerent ports.

34. Failure of Munich • Hitler takes the Rhineland in 1936 • 1938 – Czechoslovakia, Austria • Munich Conference – 1938 “Appeasement” • 1939 – Hitler invades Poland • 1939 – Non-aggression pact with USSR

35. Neutrality Tested • 1940 – Germany attacks Denmark, Norway, France • May 16, 1940 – FDR asks Congress for $1 billion for defense • U.S. increases financial assistance to the British • Fear of German threat to the U.S.

36. 3rd Term Campaign • Election of 1940 • FDR allows himself to be “drafted” by the Democratic party to run for a 3rd term • This goes against presidential precedent • Henry Wallace chosen as running mate • Runs against businessman Wendall Willkie • FDR wins 55% of the popular vote, 449 electoral votes • Becomes the first president elected to more than 2 terms

39. Neutrality Abandoned • Lend-Lease Program • U.S. Navy escorts ships in the Western hemisphere • Nazi U-boat attacks • Atlantic Charter of 1941

40. Lend Lease Program • In October of 1941, after the United States had committed itself to aiding the Allies through Lend-Lease, Roosevelt gradually sought to repeal certain portions of the Act. On October 17, 1941, the House of Representatives revoked section VI, which forbade the arming of U.S. merchant ships, by a wide margin. • Following a series of deadly U-boat attacks against U.S. Navy and merchant ships, the Senate passed another bill in November that also repealed legislation banning American ships from entering belligerent ports or “combat zones.”

41. Money sent to the Allies during the Lend-Lease Program

42. Road to Pearl Harbor • 1940 – Tripartite Pact • FDR freezes Japanese assets in the U.S., creates a trade embargo • Japan searches for raw materials, supplies • December 7, 1941 • Pearl Harbor, Hawaii • 2,000 killed & 1,000 injured • “Date which will live in infamy” • 12/8 – U.S. Declares War on Japan • 12/11 – U.S. Declares War on Germany and Italy

43. Pearl Harbor

44. Pearl Harbor

45. Pearl Harbor • Roosevelt Speech to Congress – December 8, 1941 • http://millercenter.org/president/speeches/detail/3324

46. Multiple Choice • The purpose of the Lend-Lease Act was to: (2006) • A) create military bases outside the borders of the United States • B) lend money to impoverished farmers • C) provide military supplies to the Allies • D) provide subsidies to railroads and businesses • E) exchange scientific information among nations

47. Documents • http://apcentral.collegeboard.com/apc/public/repository/ap04_frq_ushistory_b_36181.pdf • Identify 10 pieces of outside information.