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Economic Effects of WWI

Phillips 2nd

Alexandra Dunda

on 18 September 2012

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Transcript of Economic Effects of WWI

Alexandra Dunda Chris Currens
Dianna Radpour Nakisa Derakhshani
Christian Kamm Anna Krouse Economic Effects of WWI Belgium
United States
United Kingdom
Austria-Hungary Countries that were
Affected by WWI: Belgium was a neutral country and had declared its independence when it broke from the Netherlands (1831). Britain had guaranteed Belgian independence in the Treaty of London (1839). The country did not participate in the series of alliances negotiated by the great powers in the late 19th and early 20th centuries.
Belgium was trapped between the trench system and a British blockade and in the fall of 1914 faced starvation because it was dependent on imports for 80 percent of its food
In response to Belgium’s devastation, Herbert Hoover ran the Commission for the Relief of Belgium (CRB)
The CRB became an independent republic of relief, with its own flag, navy, factories, mills and railroads and it had a $12 million a month budget which was supplied by voluntary donations and government grants
Overall, the CRB saved ten million people from starvation Belgium On 28 July, the conflict opened with the Austro-Hungarian invasion of Serbia, followed by the German invasion of Belgium, Luxembourg and France; and a Russian attack against Germany
At the outbreak of the First World War, the German army carried out a modified version of the Schlieffen Plan, designed to quickly attack France through neutral Belgium before turning southwards to encircle the French army on the German border. Belgium cont. The German invaders treated any resistance as illegal and shot the offenders and burned buildings in retaliation-executing over 6,500 French and Belgian civilians between August and November 1914, usually in near-random large-scale shootings of civilians.
The German Army destroyed 15,000–20,000 buildings—most famously the university library at Louvain (capital of a Belgian province)—and generated a refugee wave of over a million people.
Thousands of Belgian workers were shipped to Germany to work in factories.
British propaganda dramatizing the "Rape of Belgium" attracted much attention in the U.S. Belgium cont. Value of German trade with USA fell from 68 million to 10 million in one year
•Agricultural production fell about 50-70%
•Industrial output fell 40% from 1914-1918
•Following the war, reparations repayments devalued the German economy
•Many people had saved marks during the war and afterwards billions of dollars reentered the economy Germany -British blockade- British navy blocks off German coast so trade cannot be done with Germany, hurts their economy: food supply runs low, many people starve, sawdust even used for a flour substitute, fuel and clothing supplies run low too, coal shortage also occurs so heating and soap were not very available
-German colonies- battle done in German colonies in Africa, damage done from fighting hurts available resources used from these countries; fighting in Pacific with Australia, New Zealand, and others results in German colonies being seized from them, diminishes their empire and takes away possible resources that could help struggling nation Germany cont. -Inflation- focus on war essential materials shuts down market for most consumer goods, as many able bodied people in work force as possible but still not enough, war budgets also ignored so more money is made to be able to spend it on war goods, makes their prices rise drastically, reparations paid to France and Britain were very high making more difficult, soldiers also want pensions for service and widows want compensation for their loss, very big effect on Germany, face a sixteen month period of hyperinflation where prices quadrupled each month, currency in circulation by the end of the war had increased 400%, standard of living goes down greatly, creates uneasy atmosphere in Germany Germany cont. France Before WWI: Still experiencing political upheaval, but also re-establishing itself as a power after a century where it suffered major defeats (Napoleonic Wars, Franco-Prussian War). Expanded empire by becoming a leading colonizer of Africa. Pre-occupied with the German threat and competition. Interested in regaining territory lost during Franco-Prussian War. Strikes alliances with Russia and UK to hem in Germany.
During WWI: Immediately lost ground to the invading Germans, but halted their progress early in the war, keeping the front lines just inside their eastern borders. Fought successful campaigns against the Germans in Africa and the Ottoman Empire in the Middle East. France cont. After WWI: Although a victor (regaining territory along France/German border lost during Franco-Prussian War), utterly devastated by the trench warfare fought against the Germans on French lands. Suffered a high loss of life, destroyed industrial region and economic devastation. France did gain additional territories though. In addition to lands along the Rhine (from Germany), also gained part of Germany’s African territories, and multiple territories in former Ottoman Empire (Middle East). France Casualties:
Total Deaths: 1,697,800 (Rank = 4 / 16)
Total Deaths % of pop.: 4.3% (Rank = 4 / 16)
Troops: 8,410,000 (Rank = 3 / 16)
Troops % of pop.: 21.2% (Rank = 2 / 16)
Military Deaths: 1,397,800 (Rank = 3 / 16)
Military Dealths % of Troops: 16.6% (Rank = 5 / 16)
Civilian Deaths: 300,000 (Rank = 8 / 16)
Civilian Deaths % of pop.: 0.8% (Rank = 11 / 16) France cont. Land and industry was destroyed
Population decreased
One in five French had been mobilized
1.4 million died
750,000 disabled
Few were available to work
Had to reconstruct war-torn regions France cont. Before WWI: Tumultuous times. Suffering economic and social problems at home (1905 revolution after loss to Japan in Russo-Japanese War), while threatened by an expanding Germany to the west. Russia had long been in expansionist mode, attempting to gain territories and influence in Balkans, through the Slav connection, placing it in opposition with German/Austrian expansionist designs in Balkans. Enters military alliance with UK and France to counterbalance the German/Austrian threat. Ukraine and Belarus have been under Russian rule for centuries. Their language and culture survive, despite being repressed by Russia Russia During WWI: Russia is outclassed by the German and Austrian armies, losing significant ground. Suffering from a high loss of life and severe economic problems leads to revolution, enabling the communists to gain power. The communists withdraw Russia from the war, ceding vast territories to Germany/Austria. The Russian Civil War ensues, as other factions attempt to assume power. Ukraine and Belarus come under German control, but are given autonomy.
After WWI: As communists secure their hold on power within Russia, they attempt to reassert authority over pre-war territories lost to the Central Powers. Soviet Russia is unable to prevent the independence of several former dependent states, such as Poland, Lithuania, Latvia, Estonia and Finland. It does manage to reassert control over Belarus and Ukraine. people publicly complaining about political decisions, the food shortage, rising prices and fuel shortage that in the end caused the Russian Revolution, and made Russia a communistic land. Russia cont. Russia cont. Russian Civil War:
Total Deaths: Estimated 15,000,000
Military Deaths: More than 1,500,000
Civilian Deaths: More than 13,000,000 Russia cont. Previous to World War I, Great Britain dominated as the world’s creditor.
During the war Britain became heavily indebted to the US. The United States emerged from the war as a rival to Britain as a financial superpower (Niall Ferguson. A fall in European living standards increased USA’s economic strength. The US was no longer a debtor, but a creditor nation. United States During World War I:
Britain blockaded Germany. Attempted to starve Germany into submission. They tried to get the Germans to sign the Treaty of Versailles. Loaned a lot of money from US in order to pay for war materials. Inflation started to rise in Britain (and Europe in general).
After World War I:
Standard of living started to decline. Smaller countries couldn’t buy as many British goods as before. United Kingdom Decrease in international trade (lack of stable currency) and Worldwide markets shrunk.Established trade patterns were disrupted but there was an intense hatred between two sides meant that it was impossible to re-establish trading patterns United States cont. Entry into the war in 1917 unleashed massive federal spending which shifted national production from civilian to war. Fortunes were built during wartime and post war inflation. The US had a 44 month economic boom. Those who were able to borrow large amounts of money could repay their debts in devalued currency from war profit. The war increased employment and wages for all in the US. After the war, the American Industry brought great profit after the war. United States cont. Inflation was single greatest economic factor because of massive
--war budgets
--demand- which caused a shortage of many consumer goods
--virtually every able-bodied person was employed to keep up with the demand Russia Casualties:
Total Deaths: 3,311,000 (Rank = 2 / 16)
Total Deaths % of pop.: 2.1% (Rank = 10 / 16)
Troops: 12,000,000 (Rank = 1 / 16)
Troops % of pop.: 7.6% (Rank = 11 / 16)
Military Deaths: 1,811,000 (Rank = 2 / 16)
Military Deaths % of Troops: 15.1% (Rank = 7 / 16)
Civilian Deaths: 1,500,000 (Rank = 2 / 16)
Civilian Deaths % of pop.: 0.9% (Rank = 8 / 16)
–3.7 million deaths; 5 million wounded
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