994 Ch. 25 • Economic Depression and Dictatorship
social unrest undermined parliamentary rule. More and more people sought
scapegoats who could be blamed for hard times: Jews, Socialists, Commu
nists, ethnic minorities and other nationalities, big business. Under such
circumstances, many people could be convinced that parliamentary govern
ment itself was to blame and that nationalistic dictatorships were the solu
tion. Amid plunging confidence and general bewilderment, international
cooperation became more difficult, particularly as the powers began to blame
each other for adopting policies that adversely affected them. Germans cas
tigated their wartime enemies for assessing massive, seemingly unjust repa
rations; people in Britain and France blamed Germany for not paying all the
reparations; many Americans blamed their own former allies for not paying
back loans. The vicious cycle of mistrust grew.
The Great Depression
By 1924, prosperity seemed to have returned to much of post-war Europe, at
least in the Western states. But beneath the surface, the increasingly inter
dependent world economy had not recovered from the war. The wartime
inflation greatly increased during the years that followed the armistice. At
the same time, steel and iron prices fell sharply after the war when demand
plunged for tanks, artillery pieces, and munitions. Overproduction and the
increasing use of hydroelectricity and oil caused the price of coal to fall
rapidly. Slowly some industrial jobs began to disappear.
European agriculture, particularly in Eastern Europe, was in a depressed
state well before the Crash of 1929. More grain, meats, and other food sup