GOV 312L: Review Sheet, Second Midterm Exam, U.S. Foreign Policy

Review Sheet, Second Midterm Exam, GOV 312L: U.S. Foreign Policy MODULE 9: THE VERSAILLES TREATY TO ORIGINS OF THE COLD WAR 1. How did the Versailles Treaty, particularly the harsh terms imposed on Germany, contribute to World War II?  Versailles Treaty: one of the peace treaties following WWI (), ended state of war between Germany and the Allied Powers  Harsh Terms o Germany lost its navy, colonies, merchant marine, territory in West and East, and army was limited to 100k o It was difficult for Germany to stand within the terms of the reparations (payments intended to cover damage of war), which were propped up by US credit. When US withdrew credit, Germany wasn’t able to pay o Germany, traditionally a proud and very nationalistic country, lost a lot of its land holdings including the Rhineland which was an important industrial center of Europe/Germany (this also cut out a lot of ‘German’ people from the country) o Note: relate Germans left out of Germany to new international boundaries and situation in Ukraine today  Contributed to WWII o The harsh terms destabilized the democratic Weimar Republic (1919- 1933). o This activated German conservatives to initiate a new revisionist foreign policy in which lost territory was retaken. o The US failure to ratify Treaty of Versailles led to its withdrawal from The League of Nations. This prompted a withdrawal from world politics (retreat to isolationism) and the loss of a strong collective security system. o The CYCLE of credit in which the US loans money to Germany, so that they can pay reparations to Great Britain, which Great Britain then provides to the US to repay war loans. This cycle collapses when the US ceases +loaning money to Germany after the Great Depression. This ignites further conservative backlash. 2. How did American capital play an important role in keeping the reparations system afloat and the withdrawal of American capital contribute to the end of German reparation payments? - In order to pay its war reparations to countries like Great Britain, Germany took loans from the US. Great Britain then used these payments from Germany to pay back the US for its wartime loans. The circular cycle of credit, and its subsequent revocation, made the Great Depression an international event. USA LOANS → GERMANY → Great Britain / France / Belgium (Reparation receipt to pay back / war time loans ) → USA ... when US increased interest rate in response to the Great Depression, people (Germany) borrowed less because they couldn’t afford it so the whole cycle fell apart 3. How did American policies contribute to the Great Depression? What were the political consequences of the Great Depression () and how did they contribute to World War II ()? ● American Policies: ○ Tight monetary policy, halting loans to Germany (1928) ○ Smoot-Hawley Tariff (1929) imposed higher tariffs on imported goods, incited other states to do likewise for American export, triggering a collapse of international trade ○ FDR took the US off the gold standard (1933) to offset deflation, which increases government spending, which lea