114 3. In 1919, after World War I, Britain, France, and the United States appeared powerful. However, postwar Europe faced grave problems. The most pressing issues were finding jobs for veterans and rebuilding war-ravaged lands. These problems made radical ideas more popular. Britain had to deal with growing socialism and the "Irish question." Fear of radicals set off a "Red Scare" in the United States.
The three democracies also faced international issues. Concern about a strong Germany led France to build the Maginot Line and insist on strict enforcement of the Versailles treaty. Many nations signed the Kellogg-Briand Pact promising to "renounce war as an instrument of national policy." In this optimistic spirit, the great powers pursued disarmament. Unfortunately, neither the Kellogg-Briand Pact nor the League of Nations had the power to stop aggression. Ambitious dictators in Europe noted this weakness.
The war affected economies all over the world. Both Britain and France owed huge war debts to the United States and relied on reparation payments from Germany to pay their loans. Britain was deeply in debt, with high unemployment and low wages. In 1926, a general strike lasted nine days and involved three million workers. On the other hand, the French economy recovered fairly quickly, and the United States emerged as the world's rop economic power. IN THE AFFLUENT 1920s MIDDLE-CLASS AMERICANS ENJOYED THE BENEFITS OF CAPITALISM, BUYING CARS, RADIOS, AND REFRIGERATORS.
However, better technologies allowed factories to make more products faster, leading to overproduction in the United States. Factories then cut back, and many workers lost their jobs. A crisis in finance led the Federal Reserve to raise interest rates. This made people even more nervous about the economy. In the autumn of 1929, financial panic set in. Stock prices crashed. The United States economy entered the Great Depression, which soon spread around the world.
Governments searched for solutions. In the United States, President Franklin D. Roosevelt introduced the programs of the New Deal. Although he New Deal failed to end the Depression, it did ease much suffering. However, as the Depression wore on, it created fertile ground for extremists.
3. How did Britain and France pay back their war loans to the United States?