The Prewar Era (1929 - 1939)

CCLXXIII

One of the great misconceptions of American history is that the United States somehow sat out the interwar years, a spectator only to the ebb and flow of world events.

The flag of the League of Nations (1920 - 1945)

This misunderstanding is founded largely on the fact that the United States chose not to join the League of Nations created by its own President, Woodrow Wilson. But though the Senate never ratified American membership in the League the U.S. took part in most international events and agreements in the twenty years between wars. It had to, being the steward of a colonial empire that stretched from Point Barrow, Alaska to American Samoa, and from The Philippines to the Virgin Islands.  America had also, to its own surprise, become the world’s leading creditor nation.

MNF Bretagne, 1922 (France)

In late 1921, the U.S. hosted the Washington Armaments Conference, after which the United States, Japan, Great Britain, France, and Italy signed the Five‐Power Treaty (1922), which capped the total tonnage of their capital ships and placed a ten‐year ban on the construction of new aircraft carriers and battleships. The Nine Power Treaty of 1922, between the United States, Great Britain, France, Italy, Japan, China, Belgium, the Netherlands, and Portugal, endorsed the American Open-Door Policy toward China, through which the signatories agreed to respect China’s territorial integrity. At the 1930 London Naval Conference, Great Britain, the United States, and Japan signed a treaty that required the scrapping of some of each nation’s battleship fleet and placed restrictions on the size and armament of cruisers and submarines. 1928 saw the adoption of the Kellogg-Briand Pact by 15 (and eventually 62) nations, a largely symbolic treaty that outlawed military aggression as an instrument of foreign policy.

The signing of the Kellogg-Briand Pact of 1928 (Frank Kellogg, U.S. Secretary of State seen signing) outlawed wars of aggression, but with no enforcement mechanisms the treaty, which remains in force, is symbolic

Fiscally, the United States had lent Great Britain, France, Italy and Japan a total of ten billion 1920 dollars (133 billion 2019 dollars) to prosecute the war. Britain and France demanded that much of this money come out of Germany’s pocket as war reparations. Germany, which had lost its colonies, had its industries parsed to near-nothing, and had portions of its territory occupied, suffered record inflation, and defaulted on its payments in 1923.

Germany adopted a suicidal economic formula in the early 1920s of printing reams of money. The resulting inflation made the Mark worthless. This 100 million Mark note was worth less than the paper it was printed on. Some economists theorize that Germany was trying to trigger a fiscal crisis in the early 1920s to gain relief from its crushing war debt. At the same time though, there was a sharp if brief Depression in the early 1920s that devastated Germany and threw its leaders into a collective panic which they did not seem able to master

To stave off a financial crisis the United States adopted the Dawes Plan --- loans were made to Germany from which Germany could pay its reparations to Britain and France. Then in turn, the U.K. and France could pay their American debts. The payoff date for this round-robin system was 1988. 

F. Scott Fitzgerald’s 1925 Jazz Age novel The Great Gatsby summarizes like few other works the hedonistic excesses of the era, but it also gives the reader a glimpse of the hollow underside of the Roaring Twenties. Several film versions have been made

Buoyed by postwar confidence, the American financial market soared. The Radio Corporation of America (RCA) was selling its stock at a modest $11.00 a share in 1924. By 1929, it was selling at $114.00 per share --- a 936% increase in just five years. Amazingly, RCA never paid out a dividend, but it kept rising because it was the one-and-only tech giant of its day. The thousands of paper millionaires RCA had created didn’t care. Their bottom lines were deeply black and their credit was good. 

And then came the Crash --- there had been rumbles in the market throughout 1928. Despite the fact that many economists claimed that economic downturns were a thing of the past, a few farsighted thinkers realized that the stock market --- and everything it represented  --- was exuberant over its own exuberance. Too many people had bought on margin. Too many companies had watered their stock to drive up the price and make themselves more attractive in the madly competitive market. Too many people were purchasing junk stocks on the supposition that they would rise.

1929:  A run by panicked depositors on The Bank of The United States in New York City. Muddled reports of the bank’s collapse brought on a nationwide wave of bank runs and collapses. Even though Wall Streeters knew that the Bank of the United States was only a local concern they couldn’t stem the tide of fear and it brought down the market. Economic historians now say that the initial collapse of the market was at first simply a correction as overvalued stocks dropped to their actual worth, but the suddenness of the deflation caused a stampede of selling that wrecked the world economy

The proximate cause of The Crash of ’29 was the failure of The Bank of The United States, a grandiosely-named one-branch bank serving immigrants on the Lower East Side of New York. Bank failures were nothing new in the 1920s --- about 5,000 American banks had failed between 1921 and 1929, barely leaving a ripple except for a few score investors here and there. However, when The Bank of The United States failed (and was thus innocently announced) it caused an effect that was to the camel’s back as the proverbial straw. Unknowing investors in Topeka and Winnemuca and Sacramento sold their securities and yanked their money out of banks and under mattresses. The Bank of The United States had failed!

The truth was that the market would not have failed if it had been healthy, but it wasn’t. Much like the rest of American culture during the Roaring Twenties, there was an incoherence to the stock market that had been well-hidden by giddiness. By 1932, RCA, the stock to have, was trading at three dollars a share. It was a good time to get into the market if you had any disposable income. Too many Americans were scrounging for dimes. Ultimately, the Dow Jones plunged from 381.17 (in September 1929) down to 41.22 in July 1932, a loss of 89.19 percent of its value.

Desperate American banks quit lending money to Germany and instead called in their Dawes Plan loans to shore up their losses. Germany defaulted. The United States government then demanded accelerated loan payments by Britain and France. France ignored Washington. At first London paid, but it was gobbling its seed corn. British demands upon Germany to accelerate reparations payments were met with more default. And the whole thing ground to a halt. Quite literally: Ford Motors cut its work week to just three days with a concomitant loss of pay. Evictions spiraled upward.  Foreclosures went through the roof.

An evicted family on the streets of Detroit, December 1929. Although they seem well-dressed and have most of their household goods this family was unceremoniously put out on the sidewalk by the local Sheriff. Especially in its early months landlords and lienholders seemed unwilling or unable to grasp that The Crash was as serious as it seemed and refused to extend a break to the “deadbeats” who couldn’t make their payments on time.  Before long, the landlords were losing their properties in turn. There was little help for such families especially before the New Deal came into effect. Unanchored and in shock, some people simply set up housekeeping outdoors

The collapse of produce prices --- due to a glut on the market due to the feverish overproduction that seemed to be the hallmark of the Twenties --- drove many small farmers into bankruptcy, especially when credit grew impossible to get as the banks died wholesale after 1929.  The drought and the Dust Bowl that began in 1931 put the final nail in the coffin.

The terrible aftermath of a “black blizzard” on the Great Plains. Some of the richest farmland in America was turned to desert as the topsoil blew away, as far as Eurasia

These numbers tell the story: The value of European exports to the U.S. in 1929 was $1.33 billion; in 1930 that number dropped to $400,000,000, a one-year loss of almost a billion dollars.  U.S. exports to Europe fell from $2.34 billion in 1929 to a virtually paltry $785,000,000 in 1932.  Much of what the U.S. exported was food. 

Things were dark, and things that breed in the dark flourished. One after another the new democracies of Europe elected dictators to their highest offices. The great irony of the interwar years was that usually it was a democratic process that brought the least democratic elements to power.

Antanas Smetona (b. 1874). Elected President of Lithuania in 1919, and then again in 1926, he suspended the Lithuanian constitution in 1929 and ruled by decree until 1940, when he was toppled from power by the occupying forces of the U.S.S.R. Afterward, he fled to the United States and died in Cleveland, Ohio in 1944

If 1929 marked the end of the Postwar Years then 1931 marked the beginning of the Prewar Years, and they began in Japan. 

Japan’s Liberal government couldn’t withstand the Great Depression. With a burgeoning population, no natural resources, no available jobs, and no credit on the collapsed world market, the Emperor had called for elections in 1930, and a cabal of right-wing Ministers and military officers took effective power in Japan early the next year. 

At the time, Japan controlled a number of former German colonies as Mandates of the League of Nations. It had annexed Korea, the southern end of Sakhalin Island, Formosa (Taiwan) and the Ryukyu Islands. It also had Extraterritorial control over the South Manchurian Railway on the Chinese mainland, which it had wrested from Russia in the Russo-Japanese War of 1905.  It maintained control of the railway militarily with a large and modern force called the Kwangtung Army. 

Within weeks of the installation of the new right wing government there was an “incident” in China near the city of Mukden. An explosion occurred along the South Manchurian rail line. It was so minor that no damage was done at all, but the Kwangtung Army swung into action and within days had occupied the whole of Manchuria on the pretext that the Chinese had launched an “attack” on Japan. 

The whole thing was a fake perpetrated by a group of Japanese junior officers. Although the government in Tokyo had not ordered the action nor knew of it beforehand (or approved of it afterward) in order to save face internationally the government decided to endorse the officers’ actions rather than admit they could not control their own army. Besides, Manchuria was rich in wheat, coal, iron, and other natural resources, all of which Japan had coveted for decades. 

The League of Nations censured Japan, demanding that they quit Manchuria and return it to China forthwith. A deeply offended Japan simply quit the League (they did not return their Mandates). And, significantly, the League of Nations did nothing, deciding that it had no jurisdiction over nonmember States.

The South Manchurian Railway in 1931. The truth of the “Mukden Incident” as it was called was discovered after the end of the Second World War when American archivists discovered highly classified internal Japanese memoranda on the subject. It’s most likely that Emperor Hirohito was lied to by his Cabinet, leading him to authorize further military action in China

This twisted diplomatic logic was the writing on the wall for the League, for if any recalcitrant member could evade League action simply by quitting then how could the League have any meaning at all? 

Following this decision, Germany, Italy, and many of the Central American countries withdrew during the 1930s. The Soviet Union was expelled in 1939.  The League remained a de jure entity until 1945 when it was succeeded by the United Nations, but it had ceased to be effective long before then.

Without the League, the order that had prevailed in the world since 1919 began to break down.

Pu-Yi, the Last Emperor of China (1906 - 1967).  He preferred the English name Henry, bestowed upon him by a British tutor. He spent most of his life as a prisoner in a gilded cell, first under the control of his Regent, then the Kuomintang, then the Japanese, then the Communist Chinese, all of whom exploited his title for their own uses

Japan established Manchukuo, a nominally independent puppet state in Manchuria under the rulership of the hapless Henry Pu-Yi, the last emperor of Imperial China, who hadn’t quite been three when he was kidnapped from his home on the orders of his great-aunt Cixi (Tzu-Hsi) and named her successor in 1908. Pu-Yi had grown up both simultaneously neglected and overindulged, and was overall a rather sadistic young boy. Overthrown in 1912 when China was declared a republic, and then returned to the throne briefly in 1917, he was perfectly willing to be restored to his throne once again under Japanese overlordship when Manchukuo was created in 1932.   

He would reign in northeastern China until 1945, and cling to his imperial title until Mao established the People’s Republic of China in 1949. 

The taking of Manchuria was not the end but only the beginning of Japanese expansion in China. Throughout the rest of the 1930s the Japanese waged a series of limited wars in remote Chinese provinces one after another, expanding their hold on the mainland. On July 7, 1937, a Japanese military detachment on post at the Marco Polo Bridge in Beijing (then Peking or Peiping) clashed with a Chinese military detachment also on post at the bridge. Insults were shouted. Threats were made. The Japanese prepared to open fire, but were fired upon by the Chinese. Tokyo declared that this Chinese “aggression” could not be tolerated (even though it was on Chinese soil) and within days a major conflict had erupted. It would be fought, with the loss of millions of lives, until Japan was defeated at the end of World War II. Since this Sino-Japanese War was subsumed into the Second World War, some historians argue that World War II actually began in 1937, not 1939; but by the same token, arguably the occupation of Manchuria in 1931 which led to the Marco Polo Bridge Incident could be said to be the first act of that war.

Japanese-controlled areas in China, 1940.  Manchuria (Manchukuo) had been a Japanese puppet state since 1931. Both Korea and Taiwan (Formosa) were already Japanese territories, and Japan occupied French Indochina after the fall of France in June of that year

Japanese-controlled areas in China, 1945. Japan also had added Burma to its holdings. Of all the Axis Powers only Japan controlled more foreign territory at the end of the war than it had at the beginning, but Japan’s power was challenged both by the Nationalists (Kuomintang) and the Communists. As a Chinese partisan said to downed American flier Ted Lawson in 1942, “Japanee man no come out at night.”

At the same time that Japan was adventuring in Manchuria and in Greater China, a leftist democracy was established in Spain, replacing the decrepit Spanish monarchy. The establishment of the Democratic Socialist Republic led immediately to a counterresponse by the military and the Roman Catholic Church in Spain, which came to support the Fascist General Francisco Franco. A terrible civil war erupted, which lasted from 1931 to 1939, and brought Italy and Germany to loggerheads with the Soviet Union in a proxy war between Fascism and Communism. In the end Franco won, and held power in Spain until he died in 1975.

The Abraham Lincoln Brigade was made up of (mostly Socialist) American volunteers who fought for the Republic during the Spanish Civil War. The United States stayed out of the fight in Spain, although President Franklin Delano Roosevelt later rued this decision. “If I had sent arms and money to Spain,” he once said, “we may have been able to avoid World War II.” Franco’s 1939 Fascist victory was accomplished with much German and Italian military help, and this success convinced the Fuhrer and the Duce that they were ready for war on a continental scale 

In 1933, Hitler became the Chancellor of Germany; in 1934, the Fuhrer; and in 1935, he enacted the Nuremberg Laws, stripping Jews of all their civil rights. At the same time he reclaimed the heavily industrialized district known as the Saar from League of Nations control in 1935, and remilitarized the Rhineland in contravention of the Treaty of Versailles (1936). At the same time Hitler’s Germany hosted the 1936 Olympics, further legitimizing the Fascist State. In 1937, Germany, Italy, and Japan joined in a mutual defense treaty called the “Pact of Steel”.  In April 1938, Germany annexed Austria (the Anschluss) and in November 1938 demanded the Czech Sudetenland, which was meekly given to him by the British Prime Minister, Neville Chamberlain. In March 1939, Germany occupied the rest of Czechoslovakia, and (after signing a Non-Aggression Pact with the Soviet Union) took over the Lithuanian port of Memel.

Neville Chamberlain, Prime Minister of the United Kingdom, returned from Munich in 1938 waving a piece of paper which he promised everyone meant “peace in our time.” All he had done was betray Czechoslovakia, a democratic ally, give Hitler additional territory, and delay the start of war for another year --- a year that the dictators spent rearming

Italy too, was in an expansionist mode. Beginning in 1923, Italy imposed harsh martial law on its colony in Libya, essentially waging a war of extermination upon the Libyan people, who were subjected to aerial bombing with poison gas canisters as well as mass executions in the style later adopted by the Nazis for use against the Jews.  The Libyan War ended in 1937, with the execution of the Libyan leader Omar Mukhtar.

Omar Mukhtar (b. 1858) was known as “The Lion of The Desert”. Mukhtar, a Berber tribal headman, led a long and surprisingly successful guerrilla war against Mussolini’s forces in Libya. Despite having no aircraft or heavy weapons, and despite being faced by aircraft dropping chemical weapons, Mukhtar fought a 14 year war against Italy. Italy engaged in the mass killings of Muslims; Mukhtar protected Italian POWs --- “We do not kill unarmed men.” He was captured and executed by Italy at age 73 in 1931

In 1935, Italy (which already had colonies in Eritrea and Somalia) invaded the independent Kingdom of Abyssinia (Ethiopia), capturing the country in a bitter war that lasted until 1939.  Both sides were guilty of war crimes. The Italians used poison gas as they had in Libya. The Abyssinians practiced genital mutilation on Italian prisoners. Shortly after “pacifying” Abyssinia, Italy invaded and occupied Albania on the southeastern coast of the Adriatic Sea in a quick campaign that lasted less than a week.

King Zog I of Albania (1895 – 1961) was a hereditary Ottoman bey who was first elected Prime Minister then President of Albania and ultimately declared it’s King. He reigned as King beginning in 1928. He fled Albania after the Italian invasion of 1939, reaching London with the help of MI-6 Agent Ian Fleming. Zog spent the rest of his life in exile

Emperor Haile Selassie of Abyssinia (Ethiopia) was born in 1892 and died in 1975. He reigned from 1930 to 1974, spending the years between 1935 and 1945 in conflict with Fascist Italy

Abyssinian child soldiers training with wooden guns in their fight to repel the Italian invasion of their nation. It was a brutal war. The League of Nations proclaimed itself helpless to check the Fascist State’s aggression

Italian aggression in his country drove the Abyssinian Emperor Haile Selassie into exile. Selassie’s pleas for help to the League of Nations were ignored; Selassie’s bitter closing remark to the League was prophetic: “Today it is me; tomorrow it will be you.”