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World History 2

<OpenstaxParagraph>
	John Maynard <OpenstaxTerm>Keynes</OpenstaxTerm>, the creator of <OpenstaxTerm>Keynesian economics</OpenstaxTerm>, was a British economist at the <OpenstaxTerm>Paris Peace Conference</OpenstaxTerm> in 1919. He was so unsettled by the potential financial repercussions of the treaty’s terms that he wrote a book contending the large reparations would mean economic ruin for Germany, endangering the entire European economy. His predictions were soon borne out.
</OpenstaxParagraph>
<OpenstaxParagraph>
	<OpenstaxTerm>Germany</OpenstaxTerm> faced numerous problems as the 1920s began. It was not only blamed for the war, but its foreign financial assets had also been seized under the treaty, further compromising its economic power, and it had been physically diminished when many rich industrial areas were cut away from its territory. Thus, one of the immediate problems facing the new democratic <OpenstaxTerm>Weimar Republic</OpenstaxTerm> government was finding a way to pay the <OpenstaxTerm>reparations</OpenstaxTerm>.
</OpenstaxParagraph>
<OpenstaxParagraph>
	The first payment came due in 1921, but Germany was unable to fund the full amount, and the unresolved issue about how to enforce the treaty terms resurfaced. The next year, 1922, Germany defaulted on its payments to <OpenstaxTerm>France</OpenstaxTerm> and <OpenstaxTerm>Britain</OpenstaxTerm>. In response, French and Belgian troops occupied the <OpenstaxTerm>Ruhr Valley</OpenstaxTerm>, the center of German iron, coal, and steel production, as a means to force repayment. The French needed the valley’s resources (especially coal). German residents of the valley resisted the occupation, and many were killed in the resulting conflict.
</OpenstaxParagraph>
<OpenstaxParagraph>
	To reach an immediate solution, Germany began simply printing more money. But this created an inflationary cycle, and the economy soon proved incapable of keeping up with the <OpenstaxTerm>hyperinflation</OpenstaxTerm> that resulted. The new money was literally not worth the paper it was printed on (<a href="#fig-00010">Figure 12.6</a>). The government had to print ever-larger denominations of bills, and people took wheelbarrows of cash to the store to buy a loaf of bread. Holding a job seemed ludicrous when pay could not keep up with a rate of inflation that increased by the day. The entire German middle class saw their savings disappear, and with their money went their support of the government.
</OpenstaxParagraph>
<OpenstaxFigure id="fig-00010" src="https://openstax.org/apps/archive/20240226.174525/resources/8dd6bbaf34f50bf3034ffb271301c0cdca27145d" alt="Three children play with stacks of banknotes. Two of the children use them to build a pyramid almost as tall as themselves. The third child sits with a dog nearby among a pile of banknotes." mediaType="image/jpg" width="651" height="771" />
<OpenstaxFigureText width="651">
	<strong>Figure 12.6</strong> In the 1920s, hyperinflation in Germany had made the national currency virtually worthless. In this photograph from 1923, Germany children play with stacks of banknotes. (credit: “Hyperinflation in Germany in 1923” by Mount Holyoke College/Wikimedia Commons, Public Domain)
</OpenstaxFigureText>
<OpenstaxParagraph>
	In 1924, the <OpenstaxTerm>United States</OpenstaxTerm> intervened by arranging the <OpenstaxTerm>Dawes Plan</OpenstaxTerm>, by which Germany’s installment payments were lowered but set to increase in the future as its economy rebounded. Foreign banks, many in the United States, also loaned Germany money to stabilize its inflationary economy. This enabled Germany to make its payments, but it also meant taking on more debt. In essence, U.S. banks were loaning money to Germany that it was using to pay Britain and France, which in turn used that money to pay back their own debts to the United States.
</OpenstaxParagraph>
<OpenstaxParagraph>
	Reparations continued to present an extreme economic hardship for Germany. In 1929, the United States announced a new proposal. The <OpenstaxTerm>Young Plan</OpenstaxTerm> stretched German reparations across a fifty-nine–year payment schedule, slightly lowered the total to $29 billion, and arranged hundreds of millions of dollars’ worth of additional loans. Germany continued to make payments until 1932, when the worldwide Great Depression made it untenable to continue. Later agreements canceled more of the remaining debt, and the last payment was finally made in 2010. In all, Germany paid only about one-eighth of the total.
</OpenstaxParagraph>
<OpenstaxParagraph>
	Poor decisions by Germany’s Weimar Republic contributed to growing public frustration with the new democratic government. Many political groups attempted to use the country’s economic problems to catapult themselves to political power. Among these was the National Socialists or <OpenstaxTerm>Nazi Party</OpenstaxTerm>, whose members favored a more authoritarian government. One man who joined the group in the early 1920s was Adolf <OpenstaxTerm>Hitler</OpenstaxTerm> (<a href="#fig-00011">Figure 12.7</a>).
</OpenstaxParagraph>
<OpenstaxFigure id="fig-00011" src="https://openstax.org/apps/archive/20240226.174525/resources/0795506d6c2e43e726db258b053f065d4f585b32" alt="A drawing of a man who wears a shirt, tie, and jacket. His hair is parted to the side, and he wears his distinctive narrow mustache." mediaType="image/jpg" width="501" height="765" />
<OpenstaxFigureText width="501">
	<strong>Figure 12.7</strong> This portrait drawing of Hitler was made in 1923, when he was about thirty-four years old. (credit: “Adolf Hitler, head-and-shoulders portrait, facing slightly left” by George Grantham Bain Collection/Library of Congress)
</OpenstaxFigureText>
<OpenstaxParagraph>
	Hitler was a veteran of the war who subscribed to the unfounded stab-in-the-back theory and had developed an abiding hatred of the Treaty of Versailles. He became a persuasive orator in the 1920s and rose up the ranks of the Nazis as he recruited more people to the group. In 1923, he decided to launch a takeover of the state government in Munich. The planned <OpenstaxTerm>Beer Hall Putsch</OpenstaxTerm> (so named because the targeted politicians were to be kidnapped at a beer hall) failed, and Hitler and many supporters were arrested. Over the next year in jail, Hitler wrote the book <OpenstaxTerm><OpenstaxEm>Mein Kampf</OpenstaxEm></OpenstaxTerm> (“My Struggle”), in which he outlined his plan for the Nazis to achieve political power and their goals for the resurgence of <OpenstaxTerm>Germany</OpenstaxTerm>. These goals included the uniting of German-speaking peoples under one government and an expansion eastward in search of <OpenstaxEm>Lebensraum</OpenstaxEm> or “living space.” His words found a sympathetic audience in the 1920s.
</OpenstaxParagraph>

12.1.4 Germany and Reparations

1 Understanding the Past

1.1 Developing a Global Perspective

1.1.1 World History as Preparation for Life After College

1.1.2 World History and Global Citizenship

1.1.3 Features of This Textbook

1.2 Primary Sources

1.2.1 Learning to Evaluate Documents and Images

1.2.2 Documentary Sources: Competing Narratives

1.2.3 Textual Sources: The Importance of Language

1.2.4 Hidden in History

1.3 Causation and Interpretation in History

1.3.1 Levels of Causation

1.3.2 Interpretation in History

2 Exchange in East Asia and the Indian Ocean

2.1 India and International Connections

2.1.1 The Mughal Empire

2.1.2 The Sultanate of Gujarat

2.1.3 The Rise of the Maratha Empire

2.1.4 European Colonialism

2.2 The Malacca Sultanate

2.2.1 The Rise of the Malacca Sultanate

2.2.2 European Malacca

2.3 Exchange in East Asia

2.3.1 Japan

2.3.2 China’s Dynastic Exchanges

2.3.3 Korea and Its Neighbors

3 Early Modern Africa and the Wider World

3.1 The Roots of African Trade

3.1.1 Saharan Trade Routes

3.1.2 The Spread of Islam

3.1.3 The Mali Empire

3.2 The Songhai Empire

3.2.1 The Rise of Imperial Songhai

3.2.2 The Reign of Askia the Great

3.2.3 The Decline of Songhai

3.3 The Swahili Coast

3.3.1 The Rise of the Swahili City-States

3.3.2 Slavery on the Swahili Coast

3.3.3 The Contest for the Swahili Coast

3.4 The Trans-Saharan Slave Trade

3.4.1 The Role of Kanem-Bornu

3.4.2 The Arrival of Europeans

3.4.3 The Later Trans-Saharan Slave Trade

4 The Islamic World

4.1 A Connected Islamic World

4.1.1 Politics and Religion in the Ummah

4.1.2 Islamic Trade Networks

4.1.3 Technology in the Islamic World

4.2 The Ottoman Empire

4.2.1 Culture and Society

4.2.2 Expansion, Revolutions, and Reform

4.2.3 Science and Technology

4.3 The Safavid Empire

4.3.1 The Rise of the Safavid Empire

4.3.2 Establishing Shi‘ism as the State Religion

4.3.3 Safavid Government and Culture

5 Foundations of the Atlantic World

5.1 The Protestant Reformation

5.1.1 The Origins of the Protestant Reformation

5.1.2 Calvinists, Anabaptists, and Anglicans

5.1.3 The Catholic Reformation and the Wars of Religion

5.2 Crossing the Atlantic

5.2.1 The Rise of Maritime Nations

5.2.2 The Columbian Exchange

5.3 The Mercantilist Economy

5.3.1 The Rise of Mercantilism

5.3.2 Mercantilism and the Expansion of Empire

5.3.3 Mercantilism and Its Critics

5.4 The Atlantic Slave Trade

5.4.1 Slavery and the Triangular Trade

5.4.2 African and North American Slavery

5.4.3 The Economics of Slavery

6 Colonization and Economic Expansion

6.1 European Colonization in the Americas

6.1.1 Spain’s Encomienda System

6.1.2 English Settlements in North America

6.1.3 French and Dutch Settlements

6.2 The Rise of a Global Economy

6.2.1 The Seven Years’ War

6.2.2 British Influence in India

6.2.3 China’s Dominance in Trade

6.2.4 Colonial Resistance and Revolution

6.3 Capitalism and the First Industrial Revolution

6.3.1 From Mercantilism to Capitalism

6.3.2 Mechanization

6.3.3 Marxism

7 Revolutions in Europe and North America

7.1 The Enlightenment

7.1.1 The Authority of Reason

7.1.2 Natural Rights

7.1.3 Social Contract Theory

7.2 The Exchange of Ideas in the Public Sphere

7.2.1 Public Debate and Dissent

7.2.2 The Republic of Letters

7.2.3 Academies, Universities, and Intellectuals

7.3 Revolutions: America, France, and Haiti

7.3.1 The American Revolution

7.3.2 The French Revolution

7.3.3 The Haitian Revolution