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It would be quite unfair to blame the United States of America for starting the Second World War. Hitler did not come to power because of the Wall Street Crash, but, as the Great Depression sparked off by the crash affected the economies of the whole developed world and encouraged the rise of extreme politics, it certainly helped. Indeed, before the crash led indirectly to the collapse of a major Austrian bank in May 1931 - a collapse which brought down the entire German banking system with it - German liberal democracy might, just, have survived; after it, the rise of extreme German nationalism could not be contained.
Stock markets depend on confidence - confidence in the soundness of the market, confidence in the individual companies and utilities quoted on it, and confidence in its regulation. When any of these factors is absent, then it is only a question of time before financial chaos and collapse ensue. The Wall Street Crash was not the first such implosion, nor by any means the last. Economists still argue about the causes of the 1929 crash, but what actually happened is clear enough, even if the reasons for it are not. Democracies and controlled economies are mutually incompatible and in a free market occasional adjustment - recession even - is probably inevitable. The United States had been heading for recession in 1914 and the First World War had got her out of it. The slack in American industry was taken up by British and French contracts for war-making materiel, and indeed there were cynics who claimed (unfairly, in this author's view) that America only entered the war to make sure that the Allies won and she got paid. As the only participant that actually emerged from the war richer than she entered it, America was poised for a period of sustained economic growth after it, and, under the administrations of Presidents Calvin Coolidge from 1921 and Herbert Hoover from 1928, she got it. Among the results of this boom were very large amounts of cash looking for a home, and some of this surplus cash was absorbed by lending to overseas governments and financial institutions: by 1929, American banks had outstanding foreign loans of $8.5bn, about half of this total being to Germany.* A proportion of these loans were undoubtedly dubious, but, as long as the lenders were happy to lend and the borrowers could service the loans at interest rates that were not onerous, nobody minded very much.
It was not just corporations and the US government that used overseas loans as a seemingly safe resting place for spare capital, but individuals too, and many not only bought into loans but piled into the stock market, which seemed as if it would go on rising for ever. By 1929 it was estimated that 9 million individuals were engaged in owning, buying and selling shares, which, if dependants are included, means that around 20 per cent of the entire US population (120 million in 1929) was involved with the stock market and directly affected by it. Many knew perfectly well that shares can go down as well as up, but there was an almost universal suspension of belief that for many years appeared to be justified as the market marched ever upwards.
America had never believed in the regulation of making money, and there was the usual crop of out-and-out swindlers who encouraged investment in companies that either did not exist or were set up purely to fleece the gullible. Most brokers - those who arranged for the purchase and sale of shares - were not dishonest, but too many of them were either incompetent or incurable optimists who encouraged the naive and the greedy to buy and to go on buying. By 1929 shares were changing hands at prices that could not possibly be justified by the underlying assets backing them, and between 1925 and 1929 the total of share prices on the New York exchange had trebled. The trouble about booms, though, is that they nearly always over-extend themselves and are followed by some sort of bust.
Matters were hardly improved by the fact that, alongside the straightforward investment in the Wall Street market, there was a great deal of buying on margin, which was effectively a way of buying shares with borrowed money, the collateral for the loan being the shares themselves. If the market went up, the profits could be enormous,* but, if it went down, then the investor had to keep pumping more and more money in to back the loan, which now became increasingly greater than the value of the shares. As it was, by October 1929 a staggering total of $6.8bn was outstanding in loans to buy shares, most of it backed by the shares themselves. In short, Wall Street had become as much a medium for gambling, with many small investors sucked in by the lure of easy money, as it was a mechanism for economic growth. It had taken twenty years, from 1907 until 1927, for the Dow Jones industrial average - the measure of the total value of a representative basket of shares on the New York market - to double. It took only another two years - from 1927 to 1929 - for it to double again. The bubble could not go on expanding for ever, and eventually it burst.
The twenties had stopped roaring well before October 1929, although very few seemed to notice. On the 17th of that month, the committee of the Investment Bankers Association of New York warned that speculation in utilities (gas, electricity, water) had 'reached danger point and many stocks are selling far above their intrinsic value'.2 No one seemed to listen. On Wednesday, 23 October, New York prices started to drop and the second-highest number of shares in the history of the exchange was traded. The telegrams demanding increases in margin payments started to go out. The next day's opening saw more selling but there was a modest upturn in late trading when the banks and investment houses pumped money in to steady the market, and the morning's losses were halved. On Friday, 25 October, the Dow Jones closed marginally up, and on Saturday marginally down but in steady trading. Both the optimists and those who were in too deeply to get out without huge losses breathed again.
Their relief was short-lived. On Monday morning, a rumour-fuelled wave of selling saw Wall Street's biggest drop in share prices to date, with $14bn lopped off the value of shares. Worse was to come. On Tuesday, 29 October, massive selling, which was now panic selling, continued. By the close of trading that day, 16.4 million shares had been traded. The Dow, which on 1 October stood at 343, was at 230 and it would be another twenty-five years before it would reach its pre-crash levels again. In all, $10bn had been wiped off the market value. To put this sum into perspective, it was equal to the total cost to America of the first war, ten times the Union budget for the Civil War and twice all the money in circulation throughout the entire nation.3 It was now breathtakingly clear that this really was a crash: there would be no correction, no rally, no pumping in of money by the banks. By the time loans had not been repaid and banks and businesses had failed, the total cost has been estimated at $50bn or $559bn in today's money.
Manufacturing industries, which were slowing down anyway before the crash, now found themselves with warehouses full of goods that nobody could afford to buy, and employers began to lay off workers. Before the crash, there were 1.5 million Americans unemployed, or 3.3 per cent of a workforce of 45 million. By 1932, that had risen to 15 million, or a third of the workforce. Inevitably, recession in the wake of the crash and the collapse of the American domestic economy quickly began to affect the rest of the world. Overseas companies that sold to America found orders were cancelled or not renewed. If Detroit was not making cars, then it did not need rubber to make tyres, and so there was a slump in the rubber plantations of Malaya, then a British colony. Much the same applied to those exporters of tin, oil and European luxury items. One of the first things that people or companies do when faced with a liquidity crisis is to call in outstanding debts, and this is what American banks began to do.
In these days, when goods cross borders with ease, it is sometimes forgotten that free trade, now accepted by most advanced nations, was still hotly argued about in the interwar years. The USA was protectionist - that is, she imposed tariffs on goods imported from abroad, in order to protect domestic producers. Had tariffs not been imposed, then foreign goods might undercut those produced at home and would drive the price of the latter down, and the wages of those who made them down too. Up to the time of the crash, these tariffs were not a serious obstacle to international trade and even those imposed on goods in direct competition with those made at home were not onerous. All that was to change in 1930 with the imposition of the Smoot- Hawley Act, which imposed swingeing import duties on a wider range of foreign goods, raising some of them by an unprecedented 50 per cent.
Now foreign countries could no longer export with ease to the United States, and some began to impose retaliatory tariffs on US goods. If commodity producers could not export to the United States, then neither would they import American wheat and meat. Grain, unsold and so unharvested, rotted in the fields of the Midwest and cattle were slaughtered because it was not worth bringing them to market. Rightly or wrongly, America was widely blamed for exporting recession: foreign governments argued - with some reason - that, if they could only be allowed to export to America, they could earn dollars and thus repay loans owing to the USA, while American exporters argued that, even though US exports were but a very small part of GDP, foreigners were deliberately driving them out of business. Either way, a crisis of global proportions was in the making.
At home, while America was protectionist, she was also non-interventionist. It was unthinkable then for the federal government to finance a public works programme (which might have solved, or at least massively reduced, unemployment) and impossible for it to direct the banking system. There was a Federal Reserve, but it had little real influence and the plethora of banks, many of them badly managed and mainly confined to one state, were generally uncooperative with it. There was no strong central bank with the power to intervene and offer a lifeline to financial institutions in trouble. It was up to the private sector to get itself out of its own mess, and that the private sector was unable to do. Domestically, President Hoover got little thanks from his countrymen for his handling of the recession. Hard though he tried to stimulate recovery - against all his own principles and those of his party, which saw rescue as being the prerogative of the individual and not the state - he could not succeed, largely because the recession was worldwide and deepening, but also because the machinery whereby he could intervene decisively simply did not exist. Then, in the summer of 1931, Hoover announced a moratorium on foreign debts owed to the government, but it was beyond his - or anyone's - power to stay debts owed to private investors and private banks, and it was those non-public debts that would prove critical.
The first spark that would ultimately ignite the Second World War was struck when Kredit Anstalt collapsed in May 1931. The largest bank in Austria and probably the most important bank in Europe, or at least in Central and Eastern Europe,* it had been in trouble in 1929, but such an institution could not then have been allowed to fail and it had been bailed out by a consortium of banks that included JP Morgan (America), Schroeder (UK) and Rothschild (Austria). Then, in March 1931, Austria turned to her natural ally, Germany, and formed a customs union or free trade area. To France, this was completely unacceptable - the enemies of 1914-18 were getting together again - and French loans to Germany and Austria were immediately called in. Two months later, in May, a run on the bank again brought support, this time from the Bank of England, the Austrian government and the Federal Reserve, but it was not enough. The bank collapsed and Austrian governmental credit had run out. Shortly afterwards came the collapse of virtually the entire German banking system - and this too had been underwritten by the Bank of England. Then, in September 1931, Britain went off the gold standard. Most of Europe went off it too, but for the Bank of England no longer to back sterling with a guarantee to change it into gold on demand inflicted far-reaching and chaotic effects on the global economy. The Bank of England had been effectively the world's banker, with sterling in wider use as an international currency than even the dollar. Many countries, including France along with most of Europe, kept their national reserves in sterling, which was regarded as totally safe and realizable against gold. Now there was no certainty that these reserves would keep their value.
In America, there was little interest in what was going on in Europe, at least from the general public. The country's own problems - economic, industrial, social - were quite sufficient without having to worry about what effects the slump might be having elsewhere. Besides, despite the fact that they showed a net profit from their involvement in the first war, many Americans had a sneaking suspicion that the wily British and the mercurial French had somehow conned them into entering it, and given that the United States had refused to ratify the Treaty of Versailles, which brought the war to an end, there was little incentive to become embroiled again in the doings of Europeans.
Across the Atlantic, however, the view was very different, and that France called in her loans to Germany and Austria in 1931 so peremptorily should have come as no surprise. Of all Germany's erstwhile opponents, France had more reason to fear and hate her than most. Prussia had played a major part in the downfall of Napoleon and she had defeated and humiliated the second Napoleon's* empire in 1870: as a crowning insult, William of Prussia was declared emperor of a united Germany in the Hall of Mirrors in Versailles. This, combined with the fact that France had to pay a very large indemnity and lost Alsace (which was largely German-speaking) and one third of Lorraine (with rather less justification), left no great love for the Germans in French hearts - indeed, they were probably disliked almost as much as the British, who at least were no threat to metropolitan France on land.
Almost half a century after the indignities of the Franco-Prussian War, France was to emerge on the winning side in 1918, but at fearful cost. With a population 7 million less than that of the United Kingdom, she had suffered twice as many military deaths, and as she already had a declining and ageing population, one in which men of military age comprised a much smaller percentage than they did in Britain, the effects were even worse than the bald statistic might indicate.4 It was France that was the moving spirit behind the harsh terms of the Versailles Treaty, and she was determined to brook no deviation from them. Suggestions by the British and Americans that payment of reparations might be modified cut no ice with successive French governments and, while Britain had some - even considerable - sympathy with the fledgling Weimar Republic, she was not prepared to break with France.
While Britain, and to a lesser extent the United States, had spent large sums in prosecuting the war, America herself suffered no damage to the homeland and, apart from the occasional air raid or shelling of a coastal town, neither did Britain. In France, however, at least 300,000 dwelling places were destroyed or damaged so badly that they had to be completely rebuilt and 20,000 factories or manufacturing establishments were rendered unusable. The country was faced with the huge problem of reconstruction while at the same time she could make few savings from disarmament as, unlike Britain, which rushed to get rid of her soldiers, sailors and airmen as quickly as possible, France, even with a defeated and disarmed Germany as a neighbour, felt unable to drop her guard completely. Furthermore, France, like Germany, had opted to finance the war from domestic and international loans rather than from increased taxation and these now had to be paid back. The cost of rebuilding and the repayment of international loans would, the French government hoped, be met from German reparations and any suggestion by the British or the Americans that Germany might not be able to pay were brusquely dismissed. To begin with, even with reparation money coming in, outgoings were only partly covered, and, when reparations lessened and then stopped altogether, serious currency inflation was inevitable. By 1925, the franc was worth only one tenth of its 1914 value, which meant that domestic investors found their wartime loans to the government repaid with a greatly reduced purchasing power. While French inflation was not nearly as bad as Germany's, it caused serious economic, social and political dislocation nevertheless.
Initially, the weak franc helped exports, but this was short-lived. The Wall Street Crash and the Great Depression hit France, with her less advanced industrial and financial base, later than the rest of the developed world, but much French overseas trade depended on the export of relatively expensive items - wines, cognacs, leather goods, textiles - and luxury goods were amongst the first savings to be made by foreign importers. From 1929 French exports fell dramatically, and from a situation of full employment, and in some sectors a shortage of labour, in 1920, unemployment soared to nearly half a million by 1933.5
During the first war, the normal political processes of competing parties trying to persuade the electorate to favour them over others had been in abeyance, and the Union Sacrée ('Sacred Union') had maintained a more or less stable support for the war. Once peace came, however, the in-fighting began again and many of the strains inherent in the Third Republic* reappeared. In very broad terms, French politics between the wars saw a somewhat incongruous alliance of the rich, the aristocracy, conservative peasant smallholders, small businessmen and investors, and much of the lower middle class - this latter previously a staunch supporter of the republican state - set against the proponents of a welfare state, socialists, communists, radical workers, civil servants and intellectuals.* These groupings were not absolute - there was considerable overlap and the influence of the left was reduced by splits in the socialist and communist ranks between those who wanted to follow Moscow's line (most, but not all, communists) and those who saw themselves as republican patriots (most, but not all, socialists). While supposedly part of the left but in practice in the centre was the Radical Socialist Party, which drew its support from white-collar workers, the lower end of the professions and some of the peasantry. On the right were a number of fairly unpleasant organizations that were opposed to the whole concept of the Republic. These included L'Action Française, which had grown out of the debacle of 1870 and was monarchist, Catholic and anti-Semitic, taking the Church's side in the old struggle between secular and clerical influence in government and sending its strong-arm squads out to beat up communists. Allied with them, although not quite so extreme, was the Croix de Feu (literally, 'Cross of Fire'), an ex-servicemen's organization, and other bodies whose beliefs varied from a vague feeling that the Third Republic was not working to outright fascism. The actual membership of these organizations was not large, but they wielded considerable influence, particularly amongst those French men and women who looked for stability in an increasingly chaotic world.
The French Army had borne the brunt of the fighting in the war of 1914-18 and had been more involved than any of the Allies in trying to prop up the White Russians after it. Hundreds - perhaps thousands - of individuals had served with military missions, in training teams, as advisers or providing logistical support to the anti-Bolshevik forces, and it was the French navy that provided naval support in the Black Sea and eventually evacuated the last of the White Russian armies along with large numbers of civilians fleeing the new Soviet regime. In the minds of many - perhaps most - professional officers of the French Army, opposition to the Bolsheviks in Russia was, after 1920, translated into fear and hatred of communism in France. To them, it was an alien philosophy imported from abroad and owing allegiance not to France but to its puppet masters in Moscow. It had been the communists and the communist-controlled press that had fanned the flames of the army mutinies of 1917, and, when the French Army marched into the Ruhr in January 1923 in order to enforce reparations, the high command saw the voluble opposition of a section of French public opinion as being symptomatic of defeatism and treason encouraged by the communists. Professional armies tend to be uninterested in politics except where it affects them directly, but in a conscript army, which the French Army was, it was inevitable that political opinions held in civilian life were carried on into the military. Tracts condemning the Ruhr occupation began to circulate amongst the soldiers and stern action was taken against such inflammatory activity. The leftist newspaper L'Humanité was banned and men spreading propaganda critical of the army or of the occupation were arrested and subject to courts martial. Meanwhile, operations in North Africa in the 1920s - against the Moroccan rebel Abd-el-Krim and in putting down incipient nationalist agitation in Algeria and Syria - cost the army 12,000 dead with little thanks from those at home.6
As the twenties wore on, many French officers, and a sizeable section of the French right, became increasingly distrustful of the institutions of the Republic, but, just as France was beginning to see some signs of peace and prosperity, the Wall Street Crash and the Depression seemed about to plunge her into chaos. It appeared to many Frenchmen that in America unregulated capitalism and democracy were failing, while at home ministerial crises, financial scandals and unemployment were all symptomatic of the failure of the state. Much military and some civilian opinion lurched to the right, and the evident failure of the attempt to institutionalize the universal brotherhood of man in the shape of the League of Nations intensified the view that only by doing away with the Third Republic and rebuilding the nation anew could a prosperous, stable and powerful France re-emerge.
Once the British had decided in 1914, somewhat late in the day, that they would, after all, make a major contribution to the war on land, they had to expand their own tiny (by European standards) army and, in most cases, turn token Dominion and colonial armies into contingents large enough to be effective.* It was the most intensive war in which the British had ever been engaged, and casualties in the inexperienced and under-trained Territorial Force and New Army units created from volunteers in the first two years of the war were inevitably far heavier than anyone imagined they might be. Despite this, the British learned, and they ended the war with the most technologically advanced and best-equipped army in the world, the most powerful navy bar none and the world's first independent air force. On the face of it, Britain emerged victorious with her Empire and her economy intact. But Britain's national debt had increased tenfold since 1914, much of her overseas investments had been liquidated to pay for the war, and the pre-war international trade network that was the basis of British prosperity had been ruptured and could not easily be reassembled. American industry, and to a lesser extent Dominion and Indian industry too, had been stimulated by the war and would now be competitors in the servicing of world markets.
Immediately after the war, there was a short-lived boom as goods not available during the war reappeared on the shelves, but this quickly collapsed. The war had meant full employment; now wartime industries were closing down and demobilized soldiers were swelling the labour pool. In 1918 Lloyd George's Liberal-Conservative coalition government had granted universal suffrage to males from the age of twenty-one and to females from the age of thirty* and this increased the power and influence of the trades unions through the fledgling Labour Party. Britain was the first nation to industrialize and now she would be the first to feel the pains of post-industrialization. As the economy slowed and went into recession followed by depression, a population accustomed to a steady improvement in living standards was not prepared to accept reductions in wages - after all, said many, we won the war, didn't we? Britain received virtually no reparations from Germany and watched anxiously as the German economy began to improve, financed by American loans. Lloyd George's coalition hung on until 1922, by which time one fifth of the workforce was unemployed, and it was the last time the once great Liberal Party held office until the coalition of 2010. The party had never recovered from the Asquith-Lloyd George wartime split and would now be eclipsed by the Labour Party. There were two weak Labour governments, in 1924 and from 1929 to 1931; otherwise, for the rest of the interwar period Britain would be managed, or mismanaged, by Conservative or Conservative-led governments.
Britain lurched from economic crisis to economic crisis. A plan to create a tariff-protected market within the Empire foundered on the Dominions' reluctance to be mere suppliers of raw materials to and importers of finished goods from Britain. Taxes rose and wages were cut. There were strikes by workers and a mutiny in the navy; the Geddes Axe scythed great swathes through public sector employment (including the armed forces) and cut state subsidies. In 1926 a dispute between the coal miners (and Britain was still hugely reliant on coal, which was privately owned) and the mine owners led to a general strike when workers in other industries came out in sympathy with the miners.* The strike was broken: the army, police and volunteers manned essential communications and supply services, but, while the miners took a cut in pay, the strike did force the government to ameliorate some of its recessional recovery policies.
In a democracy, there are no votes in defence. The aim of every politician is to get into office and, once in power, to stay there. With a restricted franchise, there will be some hope of voters occasionally putting the national interest first, but with universal suffrage, as Britain had from 1918, a greedy and ignorant electorate, which seeks instant gratification and views each issue in the light of how it affects them personally, is one which has to be pandered to. Governments do this by bribery: providing or improving things that directly impinge upon the majority of voters, and this has to be financed. In a time of economic downturn, the money can come from seizing or selling off national assets (Henry VIII and the dissolution of the monasteries), squeezing the rich (Charles I and distraint of knighthood), taxation (William Pitt inventing income tax to pay for the French Revolutionary Wars) or taking money from something else and hoping that no one will notice, or, if they do notice, will not care. After the war Lloyd George said that, while the government could afford to take chances with defence, it could not afford to take chances with social welfare. Navy, army and air force estimates were regularly cut and the nation's defence posture was based on the Ten-Year Rule, which said that there would be no major war for ten years, there was no need for an expeditionary force and all defence planning was to be based upon those assumptions. The rule was particularly pernicious by its being made a rolling assumption, so that the risk of war was always ten years in the future. The British Admiralty (albeit opposed by military dinosaurs like Churchill) had concluded that the all-big-gun battleship should be superseded by the aircraft carrier as the capital ship, but, instead of the planned seven carriers to be built, there was money for only two, and in any case, as has been noted, Britain had surrendered her naval supremacy at the Washington Naval Conference in 1922.*
The Wall Street Crash happened just as the British economy was beginning to recover, and it hit the United Kingdom earlier and more severely than the rest of the developed world outside America. Unemployment doubled, social services were reduced, taxes were raised and a National Government took Britain off the gold standard, thus devaluing the currency.+ Britain was still a world power with an empire, but underneath - and sometimes on the surface too - all was not well.
There would have been a Russian Revolution without the first war. The Tsar was not likely to moderate his autocratic style and the nods that had been made in the direction of liberalization prior to 1914 were bound to stimulate demand for more. As it was, the perceived failure of the Protector of the Slavs to intervene during the two Balkan Wars of 1912 and 1913 had not gone unnoticed, while in the wider war a variety of factors - the breakdown of the transport network, the social and economic dislocation inevitable upon rapid industrialization and the provision of food and essential supplies as a matter of priority to the armed forces while civilians, or at least poor civilians, queued for bread - left the Tsar with little room for manoeuvre.
Russia mobilized 12 million men between 1914 and 1917, more than France, or the UK or Germany. While estimates of Russian casualties vary greatly, there may have been as many as 2 million military deaths, which as a proportion of the population was a lot less than the equivalent French figure, but the civilian death toll due entirely or partially to the war may have been as much as another 2 million, a far greater figure than those suffered by any ally or enemy. With mounting casualties, no victory in sight and increasing agitation against the Tsar, the army high command made it clear that they would neither accept a transfer of power to the sickly Tsarevitch nor intervene to preserve the monarchy. The Tsar found he had no alternative but to abdicate, which he did on 2 March 1917. The Provisional Government that assumed power was a reasonable coalition, and seemed to be well able to restrain its extremists. What scuppered it was its declared intention of remaining in the war, coupled with the arrival of the exiled Lenin, inserted into Russia by the Germans and unprepared to compromise his communist principles in any way. The publication of the supposedly secret treaties with Britain and France that granted the Dardanelles - hitherto international waters - to Russia brought massive disillusionment as the liberals, socialists and intellectuals realized that they were fighting not for Mother Russia but for the government's expansionist ambitions. After a failed summer campaign - the Brusilov Offensive - desertion and mutiny began to shake the army apart. The October* Revolution followed, the communists seized power and Russia sued for peace.
Russia's chief negotiator, Leon Trotsky, attempted to buy time in the hope that Lenin's prediction of socialist revolutions in Western Europe, including Germany, would come true, and, when he refused German demands for autonomy for Poland, Finland, Estonia, Lithuania and the Ukraine (in all of which territories there were already anti-communist uprisings or resistance), the German army called his bluff and carried on advancing eastwards against no opposition. Persuaded largely by Lenin, Russia returned to the negotiations and the Treaty of Brest-Litovsk was signed on 3 March 1918. Half of the main grain-, iron-and coal-producing areas and almost half the population of the former Russian Empire were lost and German troops occupied the Ukraine with the intention of using its grain supplies to feed a German population reduced to near starvation by the Royal Navy's blockade. It was Foch, the French coordinator of Allied military effort, and Haig, Commander-in-Chief of the British Expeditionary Force, who saved Lenin - had Germany won the war, the communist regime could not have survived. As it was, the communists were not convinced that even the humiliating peace they had signed would hold, and in March 1918 they shifted the capital from St Petersburg-Petrograd to Moscow. Moscow had been a Russian capital in the past - but that was two centuries ago. Versailles cancelled Brest-Litovsk, but the Bolsheviks were by no means in control of the whole country.
The Don Cossacks rebelled against confiscation of their land in 1917; in 1918 Georgia, Armenia and Azerbaijan declared independence and from December 1918 until April 1919 the French occupied the port of Odessa, intending it to be used as a base for supplying the anti-communist forces. In May 1919 an allied force of British, French and American troops, under British command, landed in Murmansk and Archangel and attempted to support the White Russians,* before withdrawing in the autumn, and from December 1917 until 1922 the Japanese occupied Vladivostok. In June 1918, 100,000 Czechs, a mixture of deserters and prisoners of war, made common cause with the Czech Legion, a band of turncoats who were originally to be employed against the Germans alongside the Russians, and finding the situation changed considerably as a result of Brest-Litovsk, they seized control of the Trans-Siberian railway. Providing themselves with weapons by disarming ramshackle communist militias, they marched on Ekaterinburg, getting there just too late to prevent the execution of the Tsar and his family.+ They announced that they wished to be transferred to the Western Front, received the backing of the French, and entered into negotiations with the Soviets, before being eventually rescued by the Americans, who intervened to guard the railway and organized the evacuation of the Czechs from Vladivostok. The Soviets were prevented from establishing control of the Caspian Sea by the Royal Navy, which also evacuated cornered White Russian troops. As well as the Russian Civil War, the fledgling Soviet state fought wars against Estonia in 1918, Finland from 1918 to 1920, and Poland from 1920 to 1921 (when the Polish Army was supported and advised by French officers including Marshal Franchet d'Espèrey and General Weygand), all of which she lost.
Within the USSR, the anti-communist forces were eventually defeated: incompetent leadership, over-ambitious plans, an inability to coordinate the activities of the various armies, logistic difficulties, the reluctance of the Allies to become embroiled in a full-scale military campaign and a failure to realize that, apart from some of those who were not ethnic Russians, most people in what had been the Russian Empire wanted peace at almost any price. The Civil War and the wars on the boundaries of the USSR allowed Trotsky, the People's Commissar for Defence, to weld a disparate collection of workers' and peasants' militias, bits of the old Imperial Army and politically motivated bearers of whatever arms they could find into what would become the Red Army. It also convinced most of Lenin's colleagues that rather than a workers' militia, which had been seriously suggested as the future armed force of the state, there was a need for a professional, conventionally organized army.
Not only had the major grain-producing regions been lost to Russia until Versailles restored them in 1919, but the harvest in 1917-18 was bad and there was a serious shortage of food, compounded by peasant growers refusing to sell to the state grain monopoly. Furthermore, it was all very well for Lenin to speak grandly of workers and peasants' control, but the factories had been run by either the derided bourgeoisie or - heaven forfend - bloodsucking capitalists and Tsarist sympathizers. Their removal meant that there was no one capable of running the plants, and medium-and small-sized enterprises collapsed. Factory output in the early years of the USSR fell to a third of what it had been before the war. Wages fell, not returning to their pre-war level until the late 1920s, and strikes by disgruntled workers were rife. The only apparent solution was a state takeover of factories - the banks had already been taken over in December 1918 - which accorded with the communist principle of common ownership of the means of production. Lenin, the instigator and the inspiration of the communist revolution, died in January 1924. As the effective head of state, he was succeeded by Joseph Stalin.
Joseph Stalin, born Dzhughashvili, was born around 1878 in Georgia, one of the most backward parts of a backward empire, where serfdom had only finally been abolished in 1871, ten years after emancipation in the rest of Russia. Joseph came from humble origins, spoke Russian as a second language, had an interrupted education and became an incipient revolutionary at a very early age. 'Stalin' or 'man of steel' was only one of many cover names that he used during his early life, which was marked by regular detention, imprisonment, escapes and exile since he was constantly on the run and agitating against the monarchy and the capitalist system. He was a Bolshevik almost from the start and, while he revered Lenin, he did not agree with all his idol's policies. In essence, Stalin may have been an uneducated terrorist, but, while he organized bank robberies and assassinations, he was none the less a highly intelligent and politically aware terrorist, and he was completely amoral. As editor of the underground party newspaper Pravda, he initially supported the 1917 Provisional Government's policy of refusing to negotiate with the Germans. Lenin, the pragmatist, said that anyone who took this line was betraying socialism. Stalin, after gauging grass roots opinion, decided that, while the wind might not be blowing in Lenin's direction just yet, it would do so eventually, and changed his stance.
With the overthrow of the Provisional Government, Lenin appointed Stalin as Commissar (minister) for Nationalities. As he was himself a member of a minority ethnic group, this was an obvious post for him to hold. The trouble was that many of the nationalities had no wish to be communist, and even those who were prepared to tolerate communism had no wish to be organized in the way that Stalin wished. The Bolsheviks' original policy was to grant each nationality self-determination, assuming, somewhat naively, that the new states would be communist and would cleave to Mother Russia. This did not happen and Lenin and Stalin were forced to change the policy from devolution of power to centralization. Much the same happened with the economy, but in reverse: an entirely controlled economy did not work, partly because the people who might have been able to run the factories and the utilities had at worst been shot or exiled and at best were under suspicion of just waiting for the revolution to fail. Lenin, supported by Stalin, forced through the New Economic Policy, which allowed a certain amount of leeway to local entrepreneurs and producers, despite the opposition of diehards who wanted no going back to old ways. In December 1921 the Terror, during which recalcitrant officials or political opponents were subjected to show trials and then executed, imprisoned or exiled, was relaxed somewhat, and the number of secret policemen reduced from 143,000 in December 1921 to 105,000 in May 1922.*
Stalin's support for Lenin got him 'elected' - appointed - to the two controlling bodies of the party, and hence government, the Politburo and the Orgburo. The Politburo was the inner circle of the Central Committee of the Communist Party and made policy for, initially, the Russian Federal Republic and, later, for the whole of the USSR. The Orgburo was responsible for the civil service and government organizations and also for personnel matters. A Secretariat maintained liaison between the two bodies. In April 1922, in an attempt to lighten the workload on Lenin, whose health had been failing since an assassination attempt in August 1918,* Stalin was appointed to the newly created post of general secretary to the Secretariat. Most thought that the new general secretary would be a mere dogsbody and Lenin's poodle. How wrong they were would soon be apparent; the general secretary was responsible for appointments, and was able to pack the organs of state with his own supporters, while still professing total loyalty to Lenin - and, to be fair, almost certainly being totally loyal. But Stalin's support for Lenin did not extend to blind, unthinking concurrence in everything. Lenin, despite his pragmatism in ending the war and relaxing the economy, firmly believed that socialist revolutions would follow in Western Europe, and that the USSR would become a loose federation including Hungary, Germany and, perhaps, even France. Stalin, ever the realist, knew that no such revolutions were remotely likely and thought that the Party should concentrate on establishing the communist system in the USSR without wasting time in wishful thinking about what went on abroad. It was Stalin, too, who realized that Lenin's idea of linking the Russian Republic (which included a number of so-called 'autonomous' republics within it) to Belorussia, the Ukraine and the Transcaucasian Federation (Armenia, Azerbaijan and Georgia) with nothing more than bilateral treaties was not going to promote communism in those areas, and that they must be brought under the direct control of Moscow.
With his health deteriorating in the last year of his life, Lenin took no part in the governing of the country and, by the time he died on 21 January 1924, the USSR was governed by a collective which was drawn from the Central Committee and included Stalin. During his time as general secretary, Stalin had been able to advance the careers of his supporters and slow down or halt altogether those of his opponents. Once Lenin was safely embalmed, his mausoleum built by the Kremlin wall and Petrograd given yet another name change, to Leningrad, the triumvirate of Stalin, Gregory Zinoviev and Lev Kamenev* emerged as his inheritors. The other leading candidate for Lenin's mantle, Trotsky (née Bronstein), was not only associated with the Mensheviks, the relatively liberal revolutionary wing which had split from the communists in 1914, but, like Zinoviev and Kamenev, was Jewish, and anti-Semitism had not disappeared with the revolution, whatever the Bolsheviks might claim. Despite Trotsky's great service in creating the Red Army (and, in the opinion of many, saving the revolution thereby), he was dismissed from his offices, sent into exile and eventually assassinated in Mexico in 1940. It took Stalin a little longer to neutralize Zinoviev and Kamenev,+ but by 1927 they were out of favour and out of the Central Committee and Stalin was the undisputed leader of the Soviet Union.
The modest success of the New Economic Policy, the end of starvation and Stalin's caution in regard to world revolution made him genuinely popular with party members, quite apart from the fact that as head of personnel he had been able to pack party and government offices with his own men. Once firmly in the saddle, however, Stalin replaced the New Economic Policy with centralization. This involved the forced collectivization of agriculture, with cereal growers forced to sell to the state and Kulaks (yeoman farmers who owned their land) persecuted, and a Five-Year Plan which took all factories into state ownership and gave them production quotas and targets.
From outside, this forced and central direction of the national economy gained some respectability after the Wall Street Crash. All over the developed world, unfettered capitalism seemed to be failing while in Russia the proletariat appeared to be protected from its effects. Stalin knew that, if the USSR were to be dragged kicking and squealing into the modern industrialized world, then he would need finance, machinery and expertise from the West to do it, and the Western powers would only cooperate if they were sure that the USSR was not about to instigate world revolution by force of arms - hence Stalin's insistence on the slogan 'Socialism in One Country'. The USSR may in fact be the only nation of note that actually profited from the crash and the Depression that followed. With the slowdown in industrial output, unemployment and lack of investment everywhere else, banks and industrialists saw Stalin's Five-Year Plan as an opportunity not to be missed. Loans and credit agreements were arranged, tenders submitted and contracts signed as the great leap forward out of backwardness and into modernization began. Even the Ford Motor Company, that epitome of rampant capitalism, signed an agreement to build a car-manufacturing plant.* There were limits, though, to this commercial largesse. The Red Army much admired the American Christie tank suspension, even if it had been rejected by the US Army, but selling Ford cars was one thing, bits of tanks quite another. The Russians smuggled it out nevertheless and it became the basis for the BT series of Russian tanks that duly led to the highly successful T-34.+
The rush to modernize came with a very great price in human lives. The Kulaks were, understandably, opposed to agrarian collectivization, and there were estimated to be between 5 million and 7 million of them. As officers of the Red Army who came from peasant stock might not be prepared to enforce collectivization with sufficient rigour, the secret police (the OGPU) were reinforced by party militias and bully boys from the cities and the factories. Those who persisted in opposing government policy were either shot, exiled to the Russian Far East or forced to labour in physically demanding and unpleasant industries, such as mining, where the concept of workers' health and safety did not exist. It is thought that up to 5 million people perished from a combination of compulsory grain seizures, punishment for being anti-Stalin or worked to death in labour camps in the winter of 1932-33 alone.7 But Stalin's paranoid suspicion and distrust of anyone or any institution that might oppose him would soon be extended from recalcitrant farmers to the organs of the Soviet state. The armed forces would not escape, and thousands of officers of the Red Army would be removed.
According to national legend, the first emperor of Japan was the great-great-great-grandson of the Sun Goddess. The Sun Goddess created Japan - and, presumably, the rest of the world too, although this is not mentioned by the chroniclers. The Japanese imperial family traces its line back to 11 February 660 BC, which puts the creation of the world at around 810 BC, so the planet is even younger than Bishop Ussher's calculations made it.* While the Japanese claim that their emperor is the only reigning monarch whose descent is unbroken from the Sun Goddess, and that his subjects are descendants of the goddess's brother, may not be entirely accurate, Japanese emperors, unlike their Chinese counterparts, were not overthrown or deposed, largely because they had no power other than that exercised by advisers in the imperial name. That is not to say that emperors did not die mysteriously, nor abdicate early, but the emperor himself was seen as being 'above the clouds' or remote from the day-to-day governance of what was actually a loose collection of quasi-independent baronial estates, and, being above mere politics, he was a focus for loyalty and respect (but not yet actual worship) by all classes.
By around 1600 the constant feuding between rival magnates had made the country even more difficult to govern than it already had been, and Tokugawa Ieyasu, a member of a hereditary military clan, achieved supreme temporal power by a mixture of alliances and slaughter, frequently of his own allies. That Ieyasu at one stage during his early career killed his first wife and ordered his son to commit suicide in order to prove his loyalty to a superior is a fair indication of the sort of society Japan had become, and taking the traditional military title of shogun, Ieyasu established a form of government which, against all the odds, lasted for 250 years. The emperor was still the emperor, of course, but, instead of decisions being taken by the emperor's advisers, they were now taken by the shogun and, latterly, by the shogun's advisers.
Japanese society was rigidly hierarchical, bolstered by the Shinto religion, which was part ancestor worship and part a reinforcement of a caste system decreeing that one was born into a station in life out of which one could not escape. As Hinduism, which shares Shinto's belief in caste, has also demonstrated, such a system is a most effective tool for social control, and during the period of the shogunate the stratified layers of precedence - and bloody repression where that failed - enabled the shogun and his successors to hold together the often mutually antipathetic principalities. Loyalty and obedience were everything: to one's elder siblings and parents, to the village, to the local lord, to the ruler of the province, to the shogunate and ultimately to the emperor. The national religion had no moral code, other than loyalty and obedience, and there was no concept of looking after those less fortunate than oneself. Lords might take action to improve the lot of their workers, but only did so because, if they did not, the work would not get done; the idea that one should look after one's subordinates because that is the decent thing to do was quite alien. Confucian and Buddhist influences did moderate behaviour somewhat, but the shoguns were so concerned about Christianity that they banned it and banished its missionaries.
Japan had always been suspicious of outsiders, and under the shoguns she became more so. Japanese merchants did trade with China but the only Europeans allowed to maintain a permanent trading post were the Dutch, and they were confined to an island off Nagasaki. In the first half of the nineteenth century Japan was still feudal when the rest of the world had moved on, but even in its rigidly stratified society things were changing. The relative influence of the four classes into which Japanese were divided - warriors, peasants, artisans and merchants - was not as it was. The shogunate had brought relative peace, and the hereditary warriors - the samurai, who made up 10 per cent of the population and insisted on maintaining their traditional dress, carrying two swords and demanding obeisance from all those below them in the pecking order - were becoming redundant. All samurai were supposed to follow a lord, to whom they owed total and unthinking loyalty, but the shoguns had kept the lords in check by taxing them and too many of them were in hock to the merchants and money lenders and could not afford to keep great bands of retainers with nothing to do. Rather like the Junker of Prussia or the Anglo-Irish Ascendancy, the magnates and the samurai had aristocratic tastes and pretensions, but increasingly lacked the wherewithal to indulge them. Not only did the samurai consider that working for a living was beneath them, but they were also barred by law and custom from all trades and professions, other than their own, save that of intellectual or bureaucrat. As the number of samurai who could become, say, poets or civil servants was limited, by 1850 it was estimated that there were 400,000 ronin, or samurai without a liege lord, who wandered the country at best hoping to find a lord, and at worst indulging in brigandage.8
It is generally assumed that it was Commodore Perry and his Black Ships that forced Japan out of the medieval and into the modern. Perry, under orders from the American president, Millard Fillmore, sailed into Edo Bay (now Tokyo Bay) on 8 July 1853 and demanded that Japan open its ports to American trade. Two of Perry's ships were powered by steam and all of them mounted modern cannon; they were met by dummy shore batteries and warriors armed with smoothbore muskets and swords. The Japanese did not have a navy and, after procrastinating and delaying as long as they could, were forced to recognize Perry's presence. Perry delivered his president's demands, and, after announcing that he would return in a year with a fleet, sailed away. While Perry himself made much of the claim that it was he who forced Japan to open itself to the outside world, in fact the system was rotten and falling apart before Perry came on the scene. The merchant class had the money, they wanted trade with the West, and the British and the Russians were pressing for Japanese ports to be opened to them. Japanese of the governing and merchant classes knew very well that the British had trounced China militarily in the 1840s, and drew the obvious conclusion that the Japanese system of government, imported from China, might not last for ever. Japanese suspicion of the outside world had always been mixed with curiosity. There was much about Western technology that was attractive to the Japanese, and it had not escaped their notice that a small island nation such as Britain, which depended on trade, could manage very well if it had colonies and a powerful navy - a point which was reinforced in 1862 when the Royal Navy flattened the capital of a particular clan of samurai as punishment for an attack on a lone Englishman travelling across Japan overland.
While Perry may not have precipitated the period of anarchy, civil war, assassination and chaos that lasted until the Meiji Restoration in 1868, he was certainly one of its catalysts. It was a restoration because the constitution drawn up by those who emerged victorious from the bloody struggles of the previous decade supposedly 'restored' power to the emperor, but in no sense was this a liberal or enlightened revolution in the manner of those that had broken out all over Europe (and in the main failed) in 1848. Rather, it was, as one historian has put it, as if the fox-hunting squirearchy of England had risen up and seized power as the champions of liberalism.* The architects of the restoration concluded that Japan was powerless to resist the unequal treaties that she had signed to permit contact with the West, and that the only way to stand up to the Europeans was to learn their ways and be better at them than they were. Hence a written constitution, top hats and morning dress, political parties, elected assemblies and a monarch who supposedly acted in accordance with the advice of his ministers - but was now officially divine. With all this went massive and rapid modernization, industrialization and expansion; the British built railways and spinning mills and trained a Japanese navy, the Dutch built arsenals, the French built ironworks, Germans drafted the laws, trained the army and introduced the polka; the Italians, the Swiss and the Americans all were involved in one of the most rapid industrializations of a backward agricultural economy; and all the while, looking over their shoulders, were bright young Japanese learning how it was all being done. Long before Stalin, the Japanese squeezed the peasantry to provide capital for industrialization, a side effect being a population drift to the towns and cities that duly provided the workforce for the factories.
While the restoration's slogan of 'Respect the emperor, expel the barbarians' might not have been applicable just yet, that of 'Rich country, strong army' certainly was, and by 1895 the Japanese had an army of 240,000 men armed with modern weapons, mainly peasant conscripts led by Samurai officers and NCOs, and a small but efficient navy of twenty-eight steam-powered warships.+9 That same year Japan, in her first foreign war of modern times, took Korea and Formosa from a decaying Chinese empire, and in 1904-5 defeated the Russians. Even though the latter were already tottering and their armies and navy were operating a long way from home, it was none the less a decisive victory.
But underneath the top hats and Western façade, Japan had not changed all that much. Class divisions may have been legally abolished but power still rested with the aristocracy, the samurai and the merchants; the emperor may have been transformed into a constitutional monarch but he was now to be worshipped as divine; political parties may have been tolerated for a time but they had no power, and all the time were stressed the 'virtues' of obedience, loyalty, respect for the emperor, while any show of individualism was discouraged. Huge commercial enterprises grew up, with the power and influence that money brought, but they were expected to work in the interests of the state rather than in those of shareholders, and it was an unwritten alliance between the industrialists and the military, motivated not only by a need to safeguard their own narrow interests but also by a conviction that Japan should be - must be - a powerful and respected country with an empire like the British, the French, the Russians and the Americans that was to send Japan along the road of expansion, conquest and repression. Much the same motivation inspired the newly unified Germany, and it is no surprise that it was to the German, rather than to the British or American, model of government that the shapers of Japanese institutions looked.
The Japanese admiration for all things German was not reciprocated, however, and so the Japanese, in 1902, allied themselves with the British, and English newspapers lauded 'the plucky little Japs' when they went on to smash the Russian colossus. The First World War came as a welcome opportunity. Japan joined the Allies and her economy boomed. Factories proliferated and heavy industry grew, particularly steel mills, which in turn boosted shipbuilding. Japan supplied the Western powers with textiles and was able to penetrate markets that the British and French could no longer service. While she did no fighting, the presence of her navy in the Far East allowed the British to transfer ships to home waters and in 1915 she took possession of the German concession of Shantung in China. Japanese participation in the war persuaded the British to ignore her penetration of Manchuria, but her seizure of the German Pacific island territories of the Marianas, Palau, the Marshalls and the Carolines increased existing American suspicions of Japanese long-term aims.
Japan ended the war as an industrialized nation with the wherewithal to manufacture but without the necessary raw materials - coal, rubber, iron, oil - which had to be imported, and with a society deeply divided socially and economically, but united by emperor worship and dislike of foreigners. At the top were the army, the navy and the powerful industrialists, and at the bottom were the increasingly exploited toilers - factory workers and peasants. There was virtually no middle class, and, as the administration clamped down mightily on any mutterings from the left, politics revolved around conflicting interpretations of nationalism and loyalty to the emperor. Japan had sent 70,000 troops to Russia, supposedly to assist the anti-Bolshevik forces but in reality to protect her own interests - unsure though she was what those interests were - and she did not withdraw them until 1925, thus earning the permanent hostility of the new Soviet state. Japan increasingly saw herself as becoming isolated internationally - mainly, she thought, owing to the machinations of the British and the Americans, who were both anxious to protect their own interest in Asia - and so the feelings of insecurity and aggressiveness grew. The articles of the Washington Naval Treaty, which gave Japan a ratio in naval tonnage of only three to Britain's and America's five each, and the British refusal to renew the Anglo-Japanese alliance, which ended in 1923, seemed only to confirm the developed world's hostility towards Japan. All the country's most powerful interests now accepted that expansion was needed; the only argument was whether that expansion should be by peaceful persuasion or by military might, and whether it should be north into Soviet-controlled territory or south-west into China.
Japan suffered an economic wobble in 1927, when there were a series of bank failures that also brought down a number of small businesses - many of which were then gobbled up by the zaibatsu or big industrialists. This experience did make Japan better prepared for the Wall Street Crash than some other economies but, when the silk trade in the United States collapsed, Japanese exports plummeted. The solution, it seemed to many Japanese, was to expel the colonialists and create an Asian economic trading area in which Japan would provide the manufactured goods from raw materials supplied from within the bloc. The last vestige of influence held by the lobby in favour of peaceful penetration evaporated and increasingly the military, and their allies the zaibatsu, would shape Japanese foreign and defence policy.
It was not long after the first war that the cry 'We wuz robbed', or its Italian equivalent, was raised. Italy had been a unified country only since 1861, and, despite attempts by her founding fathers to link her with the glories of the Roman Empire, the truth was that 1,500 years of invasion, fragmentation and immigration had left precious few of the once rulers of the known world and had replaced them with a distillation of a variety of Balkan tribes. In modern parlance, Italy was desperate to punch above her weight, but, by the time that her king and government realized that a good way to divert attention from domestic problems was to embark on adventures abroad, there was precious little left to colonize. Italy joined the Triple Alliance with Germany and Austria in 1882, but always made it clear that she regarded it as a defensive pact and in any event would not go to war against Britain. As the Mediterranean was a British lake, this was a very sensible reservation.
Italy had interests in Eritrea and attempts to expand there led to war with Abyssinia and a disastrous defeat at Adowa in 1896. She sent a 2,000-strong contingent as part of the relief force to China during the Boxer Rebellion, and in 1911 she embarked on a campaign to seize Libya from a tottering Ottoman Empire. In a conflict marked more by Italian ingenuity in committing atrocities than by any great military skill,* Libya was eventually brought under nominal Italian control in 1912, when Turkey was distracted by the First Balkan War.
The Triple Alliance was unpopular with many Italians, who saw it as an obstacle to the incorporation of areas on her borders belonging to Austria but containing large numbers of ethnic Italians, or at least Italian-speakers. Austrian residents of Trieste were bemused by the apparent attachment of so many of their fellow citizens to opera, to the extent that the most common graffiti on the city walls was 'Viva Verdi', but they were not to know that this was shorthand for Viva Vittorio Emmanuele Re d'Italia. When war broke out in 1914, Italy declined to join Germany and Austria, pointing out that, as the alliance was a defensive pact and Austria-Hungary had declared war on Serbia, Italy was not obliged to join in. Both sides courted the Italians. To the Germans, Italian entry on the side of the Central Powers, or at least a guarantee of neutrality, would release Austrian troops for the Western Front, open another front against France and make life difficult for the British navy in the Mediterranean. From the Allied point of view, Italian belligerence would tie down large numbers of Austrians and keep them away from Russia. There was little that Germany could or Austria would offer Italy, but the Allies could hold out the promise of satisfying Italian irredentism at Austria's expense. The Pact of London, signed in April 1915, duly granted Austrian territory to Italy in return for her entering the war on the Allied side no later than 26 May 1915.
Bismarck said that Italy had a large appetite for territorial gains but very poor teeth.10 Anyone who has served with NATO regards the modern Italian Army as something of a joke, one that lends weight to the old adage, 'If you can't fight, wear a big hat', and assumes that this has always been so, but this is not entirely fair. Italy's performance in the first war was noted for the dogged stoicism of her soldiers, who were let down by her leaders and the lack of a military-industrial base. Estimates of Italian military deaths vary between 460,000 and 650,000 - losses comparable to those of Britain (700,000) and suffered by a smaller population in a shorter war. Italy made few advances and was only saved from complete collapse by the despatch of French and British divisions in late 1917. Even what is celebrated as the glorious victory of Vittorio Veneto was spearheaded by British troops, a fact that is notably absent from Italian history books.*
The Italian economy, kept running at full speed during the war, went into recession after it as contracts for war materials stopped. Soon 10 per cent of the workforce was unemployed and this was made worse by the arrival of 4 million demobilized soldiers on to the labour market. Prices rose, wages could not keep up and the government, saddled with massive war debts, faced long delays before it could begin to pay war pensions to the disabled and the families of the dead. There were strikes, riots, army mutinies and general disorder. Using the old ploy of blaming someone else, the Italian government soon began to blame the Allies. Italy had gone to war to expand her territory at the expense of the Central Powers. She got Trieste, part of the Tyrol, part of modern Slovenia and Istria at the head of the Adriatic (including large numbers of Germans and Slavs who lived there too), but what about German colonies in Africa, and what about the Italian position in the Middle East? Those German colonies and the Italian position in Eritrea had not been specifically promised in the negotiations that brought Italy into the war, but the French and the British had agreed Italy's claim to part of Dalmatia. This arrangement was not, however, agreed by the Americans, who in 1915 had been neutral and therefore not involved in the discussions. At Versailles, President Woodrow Wilson refused to recognize the London pact and took the side of Slav self-determination, thus vetoing any suggestion of an Italian Dalmatia. The erstwhile allies had therefore cheated Italy of her due rewards for all her dead, and all her problems could be blamed on them.
In the uncertainty of post-war Italy, communism began to take hold amongst the have-nots, and the inevitable counter was the rise of the extreme right. Fascism, its principles originally enunciated by Gabriele D'Annunzio, an extreme nationalist writer and son of a hero of the struggle for Italian independence, but taken up by Benito Mussolini, was the counter to communism. Both sides drew their foot soldiers from much the same pool but, while communism focused on the working classes and had an international dimension, fascism focused on the state. Mussolini, a journalist and political activist before the war (and, like many eventual fascists, originally a socialist), was conscripted into the Italian Army, became a sergeant and was invalided out with injuries sustained in training. His charismatic rhetoric, espousing patriotism and pride in race, authoritarian order, anti-corruption, elitism and economic self-sufficiency, all wrapped up in the symbolism of the Roman Empire, was a heady mix for Italians disillusioned by the failure of the war to resolve all social ills, and attracted the landowners, industrialists and Catholics terrified by the prospect of communism. In the summer of 1922 a strike called by the Socialist Party was a failure, and those services that were affected were kept running by fascist volunteers. In October 1922 Mussolini ordered a 'March on Rome', supposedly a demonstration of the Fascist Party's loyalty to the king, but in reality intended to intimidate the government into accepting the fascists into a coalition, and, when the Liberal President of the Council (prime minister) asked the king, Victor Emmanuel III, for special powers to deal with the march, the king refused, the prime minister resigned and the king appointed Mussolini as prime minister.
In the April 1924 general election Mussolini's fascists received 65 per cent of the votes cast, and even without the undoubted intimidation and vote-rigging they would have got a large majority. Mussolini managed to escape, albeit narrowly, the political backlash after the murder of a socialist leader, Giacomo Matteotti, widely believed to have been at the instigation of Mussolini (although this was never proved), and by 1926 he was able to give up all pretence of democracy and rule by decree. Once all political parties except the fascists were abolished, Mussolini was able to bring all the organs of state under fascist control and introduce a planned economy, encourage a rise in the birth rate and undertake a (half-hearted) pruning of a swollen civil service. The Italian currency, the lira, was revalued (in fact, grossly over-valued) from one seventh of its pre-1914 value to one third, and food production was increased.11 Mussolini really did drain the Pontine Marshes, something that no Roman emperor had been able to manage, and he did make the trains run on time. In 1925-26 Italy managed to secure a promise of loans from the United States, which, it was hoped, would stabilize the economy and allow staged repayments of war loans to Britain. Mussolini also solved the Roman Question - the relationship between the state and the Vatican - which had eluded Italian politicians (and the anti-clerical king) so far.* That this meant withdrawing all copies of Mussolini's pre-war pamphlet God Does Not Exist, the banning of freemasonry,+ laws banning contraceptives and 'lewd behaviour' during Lent, and considerable financial concessions made to the Church mattered not a jot. Pope Pius XI - a man just as autocratic as Mussolini - declared that the Church now recognized the fascist state and this brought huge domestic and international prestige.
All this had its positive aspects, but it also meant a savage deflation, higher taxes and, once the lira had been revalued and Italy returned to the gold standard in 1927, a drop in exports. The Wall Street Crash and the Great Depression hit Italy as it did the rest of the world, but Italy's financial markets were far less sophisticated than those of America or Britain, and, even though the effects were exacerbated by the withdrawal of loans and the overpriced lira, Mussolini managed to avoid social unrest, although living standards fell and unemployment rose. Far from weakening the fascist position, the Depression - which could be blamed on the Anglo-Saxons and linked to the refusal to award Italy her rightful spoils from the Great War - only strengthened the appeal of order and strong government. Nevertheless, the inescapable fact remained that Italy was a poor - and, in many respects, backward - country and lacked the resources to posture as a great power. In due course she would pay the price of the overweening ambition of her leaders.
THE SECOND WORLD WAR Copyright © 2010 by Gordon Corrigan.