Economic History of Europe: Twentieth Century

Transcription

1 Economic History of Europe: Twentieth Century

2 A volume in THE DOCUMENTARY HISTORY of WESTERN CIVILIZATION

3 ECONOMIC HISTORY OF EUROPE: TWENTIETH CENTURY edited by SHEPARD B. CLOUGH THOMAS MooDIE CAROL MooDIE Maps by Willow Roberts Palgrave Macmillan London Melbourne 1969

4 To the memory of WILLIAM T. GAYLE ECONOMIC HISTORY OF EUROPE: TWENTIETH CENTURY Preface, Chronology, Introduction, editorial notes, translations by the editors, and compilation Copyright 1968 by Shepard B. Clough, Thomas Moodie, and Carol Moodie. Softcover reprint of the hardcover 1st edition 1968 First published in the United States 1968 First published in the United Kingdom by Macmillan & Co 1969 Published by MACMILLAN & CO LTD Little Essex Street London w c 2 and also at Bombay Calcutta and Madras Macmillan South Africa (Publishers) Pty Ltd Johannesburg The Macmillan Company of Australia Pty Ltd Melbourne ISBN ISBN (ebook) DOI /

5 Contents PREFACE CHRONOLOGY lx Xlll INTRODUCTION PART I: THE FIRST WoRLD WAR I. Measures of Economic Mobilization: The British Example Report of the British War Cabinet, I 9 I The Problem of Essential Raw Materials in Germany Address of Walther Rathenau on Germany's Provision for Raw Materials 3 I 3. The Straining of Productive Capacity: The Russian Example Excerpts from a Russian Report on the Shortage of Metals, I9I6 4I 4 Labor Problems and the Employment of Women Report on Wartime Employment of Women in Britain Mobilization of Private Capital French Decree on the Loan of Foreign Securities to the State, I 9 I lnterallied Cooperation The Wheat Executive, November, I9I War Devastation The Devastated Area of France, December, I9I8 58 PART II: THE PEACE SETTLEMENT 8. The Treaty of Versailles Excerpts from the Treaty of Versailles, June, I9I German Reaction to the Economic Demands of the Treaty German Declaration on the Economic Provisions of the Treaty, May, I9I9 87 I o. The Reparation Bill Schedule of Reparation Payments, May, I92 I 90

6 Vl CONTENTS PART III: THE PosTWAR CRISIS I I. Economic Chaos in Eastern Europe Report of British Relief Mission to Central Europe, January, I92o 1. General Summary of the Situation in I 9 I Report on Poland During I 9 I 9 99 I 2. Peasant Agriculture and Land Reform in Eastern Europe The Rumanian Land Reform, I 9 I 7-I 8 I 04 I 3. Postwar Inflation Report of the International Financial Conference, I92o 107 I 4 The Russian Runaway Inflation Survey of the Russian Inflation, I 9 I 9 I I I I 5. Reconstruction in F ranee Titles I and II of the Law on the Reparation of Damages Caused by Acts of War, April, I 9 I 9 I I 5 I6. lnterallied Debts The Balfour Note, August, I922 I I9 I 7. The German Inflation of I 92 3 A. The Worst Phase of the Inflation, August, I 92 3 I 25 B. The Rentenbank, October, I PART IV: REcovERY AND STAGNATION, I I8. The Dawes Plan The Dawes Committee Report, I Britain's Return to the Gold Standard Churchill's Budget Speech Announcing Britain's Return to the Gold Standard, April, I Lingering Problems of Recovery Report of the World Economic Conference, A Stagnating Industry: British Shipbuilding The Balfour Committee Report on Shipbuilding, I Cartelization of Industry The International Steel Agreement, I926 I35 I48 ISJ I64 I72 PART V: SoviET EcoNOMIC PoLICY IN THE I92o's 23. The New Economic Policy (NEP) A. Resolution of the 1oth Party Congress on the Tax in Kind, March, I92 I I79 B. Lenin's Report on the Tax in Kind, April, I92 I I8I

7 CONTENTS 24. The Limits of the New Economic Policy Trotsky's Speech on the Problems of the NEP, I923 I Working Out the First Five Year Plan The Development of Planning I The Grain Crisis of I Stalin on the Peasant and Industrialization, I928 I The Third Revolution Revision of the First Five Year Plan, I PART VI: THE DEPRESSION 28. The Agricultural Crisis League of Nations Report on Agrarian Conditions, I93I 2I5 29. The Financial Crisis A. Hoover's Proposal for a Moratorium on War Debt and Reparation Payments, June, I93 I 224 B. Report of the Special Advisory Committee of the Bank for International Settlements, December, I93I Tariff Barriers Chamberlain on Britain's Adoption of Protection, February, I I. The Impact of Unemployment A. Appeal of the Unemployed of Manchester to the Public Authorities 242 B. Unemployment in the Middle Class 245 C. German Unemployment and the Dole Unemployment Relief in Nazi Germany Law for the Reduction of Unemployment, June, I The Popular Front in France A. Ministerial Declaration of the Popular Front, June, I B. Repudiation of Retrenchment 2 57 C. The Matignon Accords 2 59 D. The Forty-hour Law 260 PART VII: THE EcoNOMics of FAsciSM 34 Regulation of Labor Relations A. Italian Law on Corporations, April, I B. German Law for the Organization of National Labor, January, I934 27I Vll

8 Vlll CONTENTS 3 5. Fascist Labor Recreation Organizations Report on the Organization and Development of the Italian Dopolavoro 2 So 3 6. Land Reclamation in Italy Report on the Progress of Land Reclamation in Italy, I93I Nazi Commercial Policy A. Economic Significance of the German-Yugoslav Commercial Treaty of May, I B. Discussions Leading to German-Romanian Trade Agreement, I C. German-Romanian Trade Agreement, March, I British Mobilization PART VIII: THE SECOND WoRLD WAR A. General Review of Wartime Mobilization of Labor in Britain Lend-Lease B. Official Statement on Mobilization and Rationalization of British Industry, I94I 304 The Lend-Lease Act, March, I94I Strategic Bombing and the German War Economy The Effects of Strategic Bombing 3 I4 4 I. Postwar Economic Problems Report of the Committee of European Economic Cooperation, I The Welfare State PART IX: THE NEw EuROPE The Beveridge Report, I Planning and Economic Growth: The Example of France The Monnet Plan, I European Economic Cooperation Excerpts from the Treaty of Rome, I The Eastern European Experience: The Example of Poland A. Polish Law Nationalizing Industry, I B. Excerpts from a Resolution of the Polish Communist Party, July, I BIBLIOGRAPHY INDEX

9 Preface THERE IS an embarrassingly rich supply of documentary material for the study of Europe's economic history in the twentieth century. Any number of agencies, both public and private, gather and preserve all kinds of information relevant to economic life. Confronted with such wealth and variety of material, we were required to limit the scope of this collection in a number of ways. First of all, we omitted some topics that might ordinarily be included in economic history. Probably most notable is the absence of any attention to economic theory, and the absence of coverage of trade-union activity and labor history in general. Secondly, the primary focus has been on the major industrial countries Britain, France, Germany, the Soviet Union and, to a lesser extent, Italy. This is not to deny that economic life goes on in smaller nations or agricultural countries, but only to bow to the exigencies of space. The organization of the material reflects our assumptions about the significance of short-term economic change and about the relationship between economic and political life. It would have been possible to pursue broad secular lines of development (such as changing patterns of European and world trade, demographic change, growth and capital formation, technological advance) in a way that largely ignored the numerous and frequently violent short-term economic fluctuations. But to do so, we felt, would have limited too severely the definition of economic history and would have obscured one of the most characteristic features of the twentieth century, the tremendous extent to which economic life has been affected by the external factors of war and political upheaval. Thus, our chapters follow divisions that will not be unfamiliar to the political historian. Our account starts with I 9 I 4 rather than the turn of the century because we believe that the First World War was the beginning of the catastrophic course of twentieth-century European history, in economic as well as political life. By contrast, the general

10 X ECONOMIC HISTORY OF EUROPE economic experience of Europe before I9I4 displayed the nineteenth century's traits of stability and optimism. We have made no attempt to give full coverage to the years following the Second World War because of the limited perspective upon this period. Instead, we have taken the account to the later 195o's by sketching out three trends that seem to us of special importance: new approaches to problems of postwar recovery; the radical reconstruction of the economies of eastern European states; and the development of regional economic cooperation. The distinction between "documents" and "secondary sources" is frequently fuzzy, and this is particularly true of twentieth-century history. In order to establish a clear separation between secondary and documentary materials of economic history we have relied heavily upon public documents-on speeches, legislation, international agreements, official inquiries-that deal with important economic issues or problems. Especially in official reports, the language has that faceless and dispassionate quality that has become the badge of impartiality, although such verbal timidity should not be allowed to obscure the importance of the information presented or the issues involved. Another characteristic of official reports is their great length. With few exceptions we have been forced to cut the material, but we have always tried to give the reader a sense of the entire document and to avoid paring it down to a few lonely sentences. The diversity of sources from which the documents were assembled has raised serious problems of style. In translations by the editors, modern American usage has been followed. In the case of translations not made by the editors, we have retained the spelling and usage of the translation. However, we have taken the liberty of making minor emendations in cases of dark obscurity or to avoid confusion (for instance "billion" is used uniformly throughout the text for a thousand millions, even when "milliard" appeared in the original). For transliterating Russian titles and names, we have used the Library of Congress system with some simplifications, except where some other form of the name is common. It gives us great pleasure to acknowledge with gratitude the help we received in compiling this book. We relied heavily upon the resourcefulness and tried the patience of the librarians of Lake Forest College; and we were generously allowed to use the resources of the libraries of the University of Chicago, Northwestern University, and Columbia University, as well as those of the New

11 PREFACE X1 York Public Library. We are also indebted to our colleagues for help on portions of the book. The Introduction benefited from the criticism of Murray Herlihy and Arthur Zilversmit, both of Lake Forest College. The translations have been improved by Gaida Hughes of Lake Forest College and Eva Richter. We would also like to thank Ludwig Kolman, Maria Kolman and Arthur Rohr for work on the translations. And finally, we would like to thank the Harper editors and readers, Hugh Van Dusen, Elisabeth Jakab, Bonnie Anderson, and Ann Adelman, who have devoted much skill to improving the manuscript and to guiding it through the stages leading to publication. The errors or obscurities of the book are ours alone.

12 Chronology I9I4-I8 First World War: stalemate by end of I9I4 made economic power crucial; required mobilization and control of national economic resources everywhere; I9I7, collapse of Russia and eastern front balanced by U.S. entry. I 9 I 7 Under Provisional Government Russian economic dislocation and inflation became severe; after November Revolution, Bolsheviks decreed workers' control in fac, tories, nationalized banks, repudiated foreign government debts (I 9 I 8), tolerated peasant seizures of land. I 9 I 8-2 I Creation of new states in eastern Europe; boundary conflicts, building new national economic institutions difficult; land reforms. I 9 I 8-2 I Russian Civil War and economic policy of War Communism destroyed production and trade; March, I92 I, New Economic Policy instituted. I9I9 Paris Peace Conference: Treaty of Versailles. I 9 I Postwar economic disorders: brief postwar boom followed by depression, unemployment and labor difficulties; impossible to re-establish old trade patterns; inflation in all countries, runaway inflations in eastern and central Europe. I922 Fascist regime in Italy: extended state control over economy, especially labor (I926, Law on Corporations), and state responsibility for public welfare ( I92 7, Labor Charter). I923 French-Belgian occupation of Ruhr; German runaway inflation, halted in autumn of I by establishment of Rentenbank. I Increased cartelization of industry (especially in Germany).

13 XlV I924 I925 ECONOMIC HISTORY OF EUROPE Dawes Plan: settled reparations problem temporarily; followed by flow of private American capital to Germany and Austria. Rough benchmark for recovery of prewar production levels; Britain returned to gold standard. I Falling prices in world market for primary products. I928 I930 I93 I I932 I933 U.S.S.R. adopts First Five Year Plan; in I929 industrialization speeded up, forcible and rapid collectivization begun; Plan declared complete in I932; Second Five Year Plan (I ) stressed improved quality in production; use of income differentials as incentives. Impact of World Economic Depression felt in Europe: collapse of Austrian Creditanstalt and other central European banks followed October, I929, collapse of New York stock market. Hoover moratorium on reparation and war-debt payments; Britain abandoned gold standard. Britain abandoned free trade with adoption of general ad valorem tariff. Nazi regime in Germany: wide government financing of public works to combat Depression; labor unions destroyed and Nazi-controlled National Labor Front created ( I934); I936, major rearmament begun. I Eastern Europe brought increasingly into German commercial sphere. I936 Popular Front Government elected in France, put through moderate economic and social reforms. I Second World War: economic mobilization faster and more efficient than in I 9 I 4; warfare more mechanized, strategic bombing destroyed urban centers. I94I I 944 Lend-Lease system of U.S. aid to European allies begun. Benelux customs union agreed on by Belgium, The Netherlands and Luxembourg War's end left Europe divided between Western and Soviet occupation; devastation severe, production at

14 CHRONOLOGY XV standstill; emergency relief (through UNRRA) brought rapid but limited improvement. I Recovery and establishment of Soviet-type economies in eastern European states. I945 New British Labour Government; nationalized major industries and Bank of England; extended welfare system, instituted National Health Service. I Some French industries, banks, and insurance companies nationalized; Monnet Plan for French reconstruction and modernization adopted in I 946. I946 U.S.S.R. adopted Fourth Five Year Plan (I946-5o), directed at recovery, but along lines of earlier Plans. I947 Balance of payments crisis stalled recovery; U.S. offer of aid through Marshall Plan accepted by western European nations that formed (in I948) the Committee of European Economic Cooperation. I 948 German inflation ended by currency reforms in Allied and then Soviet sectors of Occupied Germany, established two German currencies; provided sound basis for West German recovery; East Germany brought increasingly into Soviet economic pattern. I Prewar levels of production achieved in western Europe and U.S.S.R. I95 I Treaty establishing European Coal and Steel Community signed. I953 "New Course" in U.S.S.R. and eastern Europe after Stalin's death included economic reforms. I957 Treaty of Rome establishing the Common Market signed.

15 I EUROPE BEFORE WORLD WAR I (1914) RUSSIAN EMPIRE

16 II EUROPE AFTER WORLD WAR I (1922) UNION OF SOVIET SOCIALIST REPUBLICS (RUSSIA)

17 A. WORLDWARI: AreasofMain Fighting, ~ St. Petersburg, ;l,.~ Areas of fighting, '\\ Areasoffighting, s

18 ~ ~ B. WORLDWARII: Greatest Extent \ I u.s. s.,r. part of Czechoslovakia) ( ",....1 I t ti I of German Domination, 1942 ~ ' ', r Moscow I,, '... ' I \ ' ' ' Kiev Stalingrad-.,:: \ ' \ Rostov \ ~ Allied with or occupied by Germany = Greater Germany (including AuStria, --- Farthest extent of German advance

19 IV EUROPE AFTER WORLD WAR II (1950)

20 Economic History of Europe: Twentieth Century