The Diplomacy of the New Era

1. The Diplomacy of the New Era • Secretary of State Charles Evans Hughes secured legislation from Congress in 1921 declaring the war with Germany to be at an end, negotiated with separate peace treaties with the former Central Powers, these separate treaties the lawmakers believed gave the US all the advantages of the Versailles Treaty with none of the burdensome responsibilities, Hughes then embarked on a series of efforts to build safeguards against future wars

2. The Diplomacy of the New Era • The Washington Conference of 1921 was an attempt to prevent a naval arms race between America, Japan and Britain, proposed reductions in the fleets of all 3 nations, 10-year moratorium on construction of large warships, called for the actual scrapping of 2 million tons of existing shipping, the conference ultimately agreed to accept most of the terms

3. The Diplomacy of the New Era • The Five- Power Pact (1922) established both limits for total naval tonnage and a ratio of armaments among the signatories, for every 5 tons of American and British warships, Japan would maintain 3 tons, and France and Italy 1.75 tons each, this in fact confirmed Japanese superiority in East Asia, Britain and the US had to spread their fleets around the globe while Japan was only concerned with the Pacific

4. The Diplomacy of the New Era • The Nine-Power Pact pledged a continuation of the Open Door policy in China, and in the Four-Power Pact the US, Britain, France, and Japan promised to respect one another’s Pacific territories and cooperate to prevent aggression

5. The Diplomacy of the New Era • The Kellog-Briand Pact (1928) was a multilateral treaty outlawing war as an instrument of national policy, 14 nations signed the agreement, eventually 48 other nations would join the pact, it contained no instruments of enforcement but rested on the “moral force” of world opinion

6. The Diplomacy of the New Era • The first responsibility of American diplomacy was to ensure that American overseas trade faced no obstacles to expansion, and that, once established, it would remain free of interference, preventing a dangerous armaments race and reducing the possibility of war were steps to that end

7. The Diplomacy of the New Era • The US was most concerned about Europe on whose economic health American prosperity in large part depended on, Allied powers were struggling to repay 11 billion in loans they had contracted with the US during and shortly after the war, loans that the Republican administrations were unwilling to reduce or forgive, “They hired the money, didn’t they?”, with Germany also struggling to pay its reparations, the financial structure of Europe was on the brink of collapse

8. The Diplomacy of the New Era • Charles G. Dawes an American banker and diplomat, negotiated an agreement among France, Britain, Germany and the United States under which American banks would provide enormous loans to the Germans, enabling them to meet their reparations payments, in return, Britain and France would agree to reduce the amount of those payments, Dawes won the Nobel Peace Prize for his efforts

9. The Diplomacy of the New Era • The Dawes Plan was responsible for the growing American economic presence in Germany, created circular pattern: America would lend money to Germany, which Germany would use to pay reparations to France and England, who would in turn use those funds to repay war debts to the US

10. The Diplomacy of the New Era • American automobile manufacturers were opening European factories, capturing a large share of the overseas market, other industries were establishing subsidiaries worth more than $10 billion throughout the Continent, taking advantage of the devastation of European industry and the inability of domestic corporations to recover

11. The Diplomacy of the New Era • Some in the American government warned that the reckless expansion of overseas loans and investments threatened disaster; that the US was becoming too dependent on unstable European economies, the high Republican tariffs of the 1920s made it difficult for European nations to export their goods to the US making it difficult to find the money necessary to repay their loans, these warnings fell on deaf ears and US economic expansion in Europe continued until 1931

12. The Diplomacy of the New Era • During the 1920s the American military maintained a presence in many Latin American countries, US investments in Latin America more than doubled between 1924 and 1929, American corporations built roads and other facilities in many areas, American banks offered loans to Latin American governments who were also having difficultly earning the money to repay them in the face of American high tariffs, resentment of “Yankee Imperialism” was rapidly growing in the late 1920s

13. The Diplomacy of the New Era • The world financial crisis that began in 1929 and greatly intensified after 1931 was not only creating economic distress, it was producing a dangerous nationalism that threatened the weak international agreements established during the previous decade, the Depression was toppling some existing political leaders and replacing them with powerful, belligerent governments bent on expansion as a solution to their economic problems

14. The Diplomacy of the New Era • In Latin America, Hoover worked diligently to repair some of the damage created by earlier American policies, he made a 10-week goodwill tour of the region before his inauguration, he tried to abstain from intervening in the internal affairs of Latin American countries, and moved to withdraw troops from Haiti.

15. The Diplomacy of the New Era • America would grant diplomatic recognition to any sitting government without questioning the means it had used to obtain power, Hoover even repudiated the Roosevelt Corollary to the Monroe Doctrine by refusing to permit American intervention when several Latin American countries defaulted on their debt obligations to the US in 1931

16. The Diplomacy of the New Era • Hoover proposed a moratorium on debts in Europe in 1931, but this failed to attract broad support or produce financial stability, many economists and political leaders appealed to Hoover to cancel all war debts owed to the US, but Hoover refused to cancel war debts in Europe, and several European nations promptly went into default

17. The Diplomacy of the New Era • At the World Disarmament Conference (1932) France rejected idea of disarmament, called for the creation of an international army to counter the growing power of Germany, Hoover continued to urge major reductions in armaments including an immediate abolition of all offensive weapons and a 30% reduction in all land and naval forces, the conference ended in failure

18. The Diplomacy of the New Era • Benito Mussolini and his Fascist Party had been in power in Italy since the early 1920s and by the 1930s it was increasingly nationalistic and militaristic, its leaders were threatening an active campaign of imperial expansion

19. The Diplomacy of the New Era • Hitler and the National Socialist Party (Nazis) would be in power in Germany by 1933, led by a belief in the racial superiority of the Aryan people, his commitment to providing Lebensraum (living space) for his “master race”, his pathological anti-Semitism and his passionate militarism all threatened European peace in the 1930s

20. The Diplomacy of the New Era • The Japanese, reeling from an economic depression of their own, were concerned about the increasing strength of the Soviet Union and of Chiang Kai-Shek’s nationalist China, the were alarmed at Chiang’s insistence on expanding his governments power in Manchuria, Japan had maintained effective economic control of Manchuria since 1905.

21. The Diplomacy of the New Era • Japan’s military leaders staged a coup in 1931, seized control of foreign policy from the weakened liberals and launched a major invasion of northern Manchuria and by early 1932 the conquest of Manchuria was complete

22. The Diplomacy of the New Era • Secretary of State Henry Stimson issued stern warnings to Japan and tried to use moral suasion to end the crisis, Hoover forbade him from cooperating with the League of Nations in imposing economic sanctions against the Japanese, the US refused to grant diplomatic recognition of new Japanese territories, Japan was unconcerned and in early 1932 expanded its aggression farther into China, attacking the city of Shanghai and killing thousands of civilians

23. The Diplomacy of the New Era • By the time Hoover left office in early 1933 it was clear that the international system that the US had attempted to create in the 1920s, a system based on voluntary cooperation among nations and on an American refusal to commit itself to the interests of other countries, had collapsed

24. Isolationism and Internationalism • Hoover had argued that only by resolving the question of war debt and reinforcing the gold standard could the American economy hope to recover, Roosevelt agreed to participate in the World Economic Conference (1933) in order to resolve these issues, FDR allowed the gold value of the dollar to fall in order to enable American goods to compete in the world markets, at the conference FDR’s Bombshell was announced in which he rejected any agreement on currency stabilization

25. Isolationism and Internationalism • FDR singed a bill in 1934 forbidding American banks from making loans to any nation in default on its debts, the result was to stop the old, circular system by which debt payments continued only by virtue of increasing American loans, within months war-debt payments from every nation except Finland stopped for good

26. Isolationism and Internationalism • The Reciprocal Trade Agreement Act (1934) authorized administration to negotiate treaties lowering tariffs by as much as 50% for reciprocal reduction by other nations, Secretary of State Cordell Hull negotiated new treaties with 21 countries resulting in an increase in American exports of nearly 40%.

27. Isolationism and Internationalism • Most of the agreements admitted only products not competitive with American industry and agriculture, so imports into the US continued to lag, therefore other countries were not obtaining the US currency needed to buy American products or pay off debts to US banks

28. Isolationism and Internationalism • America was eager for a new relationship with the Soviet Union as a possible source of trade, the Soviets also wanted a new relationship with the US in order to help contain the growing influence of Japan who were viewed as a threat, in 1933 the US and Soviet Union reached an agreement in which the Soviets would cease their propaganda efforts in the US and protect American citizens in Russia, in return the US would recognize the communist regime, both countries still viewed each other with considerable mistrust

29. Isolationism and Internationalism • During the 1930s the US increased imports/exports with the other nations in the Western Hemisphere by 100%, at the Inter-American Conference (1933) Secretary of State Hull signed a policy statement stating “no state has the right to intervene in the internal or external affairs of another”.

30. Isolationism and Internationalism • The Good Neighbor Policy did not mean that the US had abandoned its influence in Latin America, it meant that instead of military force the US would use economic influence in Latin America, it did nothing to stem the growing American domination of Latin American economies

31. Isolationism and Internationalism • Support for isolationism emerged after disarmament failures at conferences in Geneva and London (Germany, Italy, and Japan walked out of them) Americans were faced with a choice between more active efforts to stabilize the world or more energetic attempts to isolate the nation from it, most Americans unhesitatingly chose the later

32. Isolationism and Internationalism • Internationalists (old Wilsonians) were disillusioned with the League of Nations and its inability to stop Japan in East Asia, Populists were arguing that powerful business interests (Wall Street, munitions manufacturers, and others) had tricked the US into entering WWI.

33. Isolationism and Internationalism • An investigation by Senator Gerald Nye (ND) revealed exorbitant profiteering and blatant tax evasion by many corporations during the war, and it suggested that bankers had pressured Wilson to intervene in the war in order to protect their loans abroad

34. Isolationism and Internationalism • In 1935 FDR asked the Senate to ratify a treaty to make the US a member of the World Court, isolationists (led by Hearst newspapers and Father Charles Coughlin) opposed the treaty, which resulted in the defeat of the treaty, this was political blow to FDR and he did not challenge the isolationist tide any time soon

35. Isolationism and Internationalism • The Neutrality Act of 1935 was designed to prevent a recurrence of the events many Americans now believed had pressured the US into WWI, this law established a mandatory arms embargo against both victim and aggressor.

36. Isolationism and Internationalism • Empowered the President to warn American citizens that they might travel on the ships of warring nations only at their own risk, thus “protection of neutral rights” could not be used as an excuse for American intervention in a European war, these provisions were easily renewed in 1936

37. Isolationism and Internationalism • The Neutrality Act of 1937 established a cash-and-carry policy in which belligerents could purchase only nonmilitary goods from the US, had to pay cash, and had to carry the goods away on their own vessels

38. Isolationism and Internationalism • Mussolini launched attack on Ethiopia in October 1935, the League of Nations protested, Italy simply resigned from the organization, completed its conquest of Ethiopia and formed an alliance with Nazi Germany (the Axis), this action on the part of Italy renewed American determination to isolate themselves

39. Isolationism and Internationalism • General Francisco Franco (1937), leader of the Falangists (similar to the Fascists in Italy), fought the Spanish Civil War supported militarily and economically by Hitler and Mussolini, some individual Americans traveled to Spain to fight the fascists (Abraham Lincoln Brigade) but the US government joined with France and Britain in an agreement to offer no assistance to either side

40. Isolationism and Internationalism • In 1937 Tokyo attacked China’s five northern provinces, in response FDR gave the Quarantine Speech, aggressors should be “quarantined” by the international community to prevent the contagion of war from spreading, American public response to the speech was hostile and FDR drew back from taking a stand

41. Isolationism and Internationalism • On December 12, 1937 the US gunboat Panay was bombed and sunk by Japanese aviators on the Yangtze Rover in China, the attack occurred in broad daylight with clear visibility, a large American flag had been painted on the deck of the Panay, isolationists argued bombing had been an accident and pressured FDR to accept Japan’s apology

42. Isolationism and Internationalism • In 1936 Hitler marched the German army into the Rhineland violating the Treaty of Versailles, in March 1938 German forces marched into Austria to complete the Anschluss making a union of all German-speaking people under one flag, in September 1938 Hitler demanded that Czechoslovakia cede to him the Sudetenland.

43. Isolationism and Internationalism • Most Western nations were appalled at the prospect of another war and were willing to pay almost any price to settle the crisis peacefully (it was in October 1937 that the famous War of the Worlds radio broadcast was made setting off a panic)

44. Isolationism and Internationalism • Munich Conference – on September 29, 1937 Hitler met with the leaders of Britain and France in an effort to resolve crisis, the French and the British agreed to accept the German demands in Czechoslovakia in return for Hitler s promise to expand no further “This is the last territorial claim I have to make in Europe”.

45. Isolationism and Internationalism • Chamberlain returned to Britain a hero assuring the British that the agreement meant “peace on our time”, this policy became known as appeasement, Hitler occupied Czechoslovakia in March of 1939 and in April Hitler began making threats against Poland, Britain and France assured Poland that they would come to its defense in the event of an invasion

46. Isolationism and Internationalism • The British and French attempted to draw the Soviet Union into a mutual defense agreement, but Stalin had already decided that he could expect no protection from the West, Stalin had not even been invited to the Munich Conference, Stalin signed a non-aggression pact with Hitler in August 1939

47. Isolationism and Internationalism • September 1, 1939 Poland was invaded by Germany, Britain and France declared war on Germany, and WWII had begun

48. From Neutrality to Intervention • “This nation will remain a neutral nation, but I cannot ask that every American remain neutral in thought as well” – FDR 1939, there was never any question that FDR and the majority of the American people favored Britain, France, and the other Allied nations in WWII

49. From Neutrality to Intervention • At the very least Roosevelt believed the US should make armaments available to the Allied armies to help them counter the highly productive German munitions industry, in September 1939 FDR asked Congress for a revision of the Neutrality Acts, specifically the provisions prohibiting the sale of US weapons to any nation engaged in war.

50. From Neutrality to Intervention • FDR wanted the arms embargo lifted, powerful isolationist opposition forced him to accept a weaker revision that still prohibited American ships from sailing into war zones but did allow the belligerents to buy arms on the same cash-and-carry basis as nonmilitary materials