564Chapter 28Britain was one of the most heavily unionized
states in the world, with 30 percent of workers belong-
ing to trade unions in 1921. The miners’ unions were
especially militant, and they led major strikes in 1919
and 1921. Though elections in early 1924 created a
short-lived Labour Party government in which Ramsay
MacDonald became Britain’s first socialist prime minis-
ter, angry workers obtained little welfare legislation ex-
cept the Pension Act of 1925. MacDonald, the
illegitimate son of a farm laborer and a servant, had
risen through self-education to become the leading the-
orist of British socialism. He rejected Marxist doctrines
of class warfare and violent revolution and believed in
an evolutionary, democratic socialism as “the hereditary
heir of liberalism.” After MacDonald granted diplo-
matic recognition to the USSR, however, the evolu-
tionary process restored conservatives to power, and
Stanley Baldwin (the son of a rich industrialist) formed
his second government. Social unrest worsened under
both governments. Mine owners lowered wages and
lengthened the working day, leading to another wave
of strikes, which culminated in the general strike (when
all workers were expected to leave their jobs) of 1926.
More than 2.5 million workers in a labor force of 6 mil-
lion walked out. The Baldwin government, fearful of
the revolutionary potential of the general strike, made
enough concessions to bring back moderate workers.
With the general strike beaten, conservatives quickly
passed the Trade Disputes Act of 1927 limiting the
right to strike. General strikes, sympathy strikes, and
strikes in many occupations (such as the police) became
illegal.
The postwar government in France was a similar
conservative coalition, led by Raymond Poincaré. Poin-
caré, educated as both an engineer and a lawyer, had
held elective office since the 1880s, culminating in the
wartime presidency. As premier in the early 1920s,
Poincaré concentrated upon the rebuilding of France
and a nationalist agenda. He expected the strict en-
forcement of the Versailles Treaty and ordered a mili-
tary occupation of the Ruhr (permitted by the
reparations agreement) when Germany defaulted on
payments in 1923. French conservatives supported
Poincaré in treason trials of wartime pacifists, the disso-
lution of the militant confederation of trade unions (the
CGT), aid to big business and the peasantry, and con-
cessions to the Catholic Church. During the mid- and
late 1920s, Briand persuaded the conservative coalition
to relax its anti-German nationalism, and Poincaré ac-
quiesced in this policy to concentrate upon economic
recovery. French problems were so bad that Poincaré
asked and received the right to solve them by decrees
without a vote of the Chamber of Deputies. He stabi-
lized the French franc in 1926–28 by devaluing it to
20 percent of its prewar value. This meant that the
government repudiated 80 percent of its foreign debt
written in francs, chiefly war bonds. When Poincaré
retired in 1929, his accomplishments included a stable
currency, a growing economy, record industrial pro-
duction, and the reconstruction of most war-damaged
regions. Briand had simultaneously won guarantees of
peace. Many resentments simmered below the surface,
but France appeared to have made a strong recovery.The Great Depression of the 1930s
By 1928 Europe had largely recovered from the ravages
of World War I. Total productivity stood 13 percent
above the 1913 level, slightly stronger in western Eu-
rope (16 percent). The year 1929, however, marked the
beginning of the worst economic depression of the
twentieth century. This crisis began in the United
States with the collapse of stock market values known
as the Wall Street Crash, and it spread into a global
collapse in 1929–32. Most of Europe felt the depression
begin in 1930, and it soon became the deepest of the
industrial age, comparable only to the depression of the
1840s, which contributed to the outbreak of the revolu-
tions of 1848. The collapse of the American stock val-
ues, the loss of American credit, the recall of American
loans, the rise of American tariffs, and the withering of
exports to America caused deep declines in European
production and frightening levels of unemployment. As
unemployment rose, small shops went bankrupt; as
world trade collapsed, big industries such as shipbuild-
ing closed down. In 1931, when banks could not obtain
repayment of outstanding loans, a wave of bank failures
swept Europe. After a great Austrian bank, the Kredit-
Anstalt, failed, much of the banking system of eastern
and central Europe collapsed, and the wave of bank
closings reached back to the United States. Most of Eu-
rope was still struggling to recover from this cycle
when World War II began in 1939.
The most dramatic measure of the crisis of the
1930s is in unemployment data (see table 28.3). De-
spite the recovery of the late 1920s, Europe had not re-
turned to the low levels of joblessness seen in 1913–14
(3–4 percent), but no one was prepared for the cata-
strophic unemployment of the 1930s. Most of Europe
had double-digit unemployment in 1930, then rates
above 20 percent in 1931–32. Many countries, how-