Puzzling American Economic Policy in the Interwar period.
By 1918 the Great War not only physically affected millions of people, but it also destroyed the system of global capitalism, which existed prior to 1914. During the interwar period, the modern world demanded participation in reconstruction, yet American officials believed this demand could be satisfied without sacrificing political noninvolvement with European affairs (Hogan, 13). This left the major powers in a precarious position, lacking the infrastructure to conduct international trade, investment, and currency stabilization, which existed before 1914. As a result, the major powers squabbled with each other through their “great power rivalry,” which inhibited global cooperation …show more content…
By 1920 the value of exports stood at $8.25 billion, an increase of 4% over the year 1919 and 333% greater than 1913. The value of imports stood at $5.75 billion, a 35% increase from 1919 and nearly 300% over 1913 (Kaplan, 10). The United States government claimed that over the course of the war, it had loaned Europe $10.3 Billion, and that this sum was to be repaid as soon as possible, with the agreed upon 5% interest. The Europeans could not fathom the American Governments inflexibility on these repayments, arguing, “the war had been fought for common objectives” (Kaplan, 10). The pressure on Germany to repay war reparations grew as a result of American demands on Allied nations. This undoubtedly made repayment of the vast sums of money owed to the allies under the Dawes Plan an even bigger strain on the recovering German economy. Perhaps the most enigmatic American policy implemented after the war however, was the Fordney-McCumber tariff of. During a time when the United States was placing such pressure upon foreign governments to repay their loans, the United States simultaneously implemented tariffs so high; they effectively blocked entry into the American domestic market. At the time, for a creditor country had the highest tariffs in the world (Kaplan, 14). The tariff, according to President …show more content…
This partnership resulted in the successful launch of the Austrian and German stabilization schemes of 1923 and 1924 (Hogan, 57). Since Versailles, important British and American officials began to realize that immense reparation payments by Germany would only slow European Recovery. Interestingly, the preferred policy on handling these recovery plans was through private
By 1918 the Great War not only physically affected millions of people, but it also destroyed the system of global capitalism, which existed prior to 1914. During the interwar period, the modern world demanded participation in reconstruction, yet American officials believed this demand could be satisfied without sacrificing political noninvolvement with European affairs (Hogan, 13). This left the major powers in a precarious position, lacking the infrastructure to conduct international trade, investment, and currency stabilization, which existed before 1914. As a result, the major powers squabbled with each other through their “great power rivalry,” which inhibited global cooperation …show more content…
By 1920 the value of exports stood at $8.25 billion, an increase of 4% over the year 1919 and 333% greater than 1913. The value of imports stood at $5.75 billion, a 35% increase from 1919 and nearly 300% over 1913 (Kaplan, 10). The United States government claimed that over the course of the war, it had loaned Europe $10.3 Billion, and that this sum was to be repaid as soon as possible, with the agreed upon 5% interest. The Europeans could not fathom the American Governments inflexibility on these repayments, arguing, “the war had been fought for common objectives” (Kaplan, 10). The pressure on Germany to repay war reparations grew as a result of American demands on Allied nations. This undoubtedly made repayment of the vast sums of money owed to the allies under the Dawes Plan an even bigger strain on the recovering German economy. Perhaps the most enigmatic American policy implemented after the war however, was the Fordney-McCumber tariff of. During a time when the United States was placing such pressure upon foreign governments to repay their loans, the United States simultaneously implemented tariffs so high; they effectively blocked entry into the American domestic market. At the time, for a creditor country had the highest tariffs in the world (Kaplan, 14). The tariff, according to President …show more content…
This partnership resulted in the successful launch of the Austrian and German stabilization schemes of 1923 and 1924 (Hogan, 57). Since Versailles, important British and American officials began to realize that immense reparation payments by Germany would only slow European Recovery. Interestingly, the preferred policy on handling these recovery plans was through private