Social+and+Economic+Changes+in+France+WWI-1929

The effect of WWI on the French Society and Economy during the 1920s. As a result of World War I (WWI), France’s entire northeast quadrant was annihilated, with an estimated 7% of the entire population dead or incapacitated(1). More than one thousand miles of canals, seven million acres of land, 50% of roads in the region, three thousand miles of railroads, and an estimated 220,000 houses were destroyed. The Reparations Commission estimated the cost of the destruction was 34 billion francs; a number later revised to 55 billion francs at their 1913 value, or 125% of France’s 1913 national income(2).The disruptions induced by the Great War fundamentally changed France economically, socially and politically during the era from 1913 to 1929.

Following the Great War, France was in a period of economic ruin. The northeast was in shambles as a result of the constant fighting during the five year occupation by German forces. The area in and around Ypres was particularly devastated. The immediate effects were first felt in the investment sectors. Investment fell 44% from pre-war levels across the board from the agrarian sector to the trade and services sector(3). As in the world’s present recession, this led to an inability of most businesses to expand, and in some cases to survive. The money that usually flowed through the country all but evaporated and the populace began saving more and spending less. Not only did investment and trade within France wither during and directly after the war, but also trade within the French Empire faded from 11.3% of total foreign trade to a mere 6.8%(4). In addition, the trade deficit deepened during the war, from 1.54 billion francs in 1913 to 17.58 billion francs in 1918. The immediate Post-War world economy did little to mitigate this huge gap in imports vs. exports as the trade deficit dropped an additional 5.43 billion Francs to land at 23.01 billion francs in 1920(5). The Dawes Plan of 1924 did little to successfully deliver the reparations in full from Germany, reparations that France desperately needed to re-build their nation. The money that was received from Germany was worthless before 1923. The introduction of the //Rentenmark// after 1923 did not solve the problem because the German government did not have the gold to back the billions of //Rentenmarks// needed to pay back France.  Germany was in no position to begin flooding the market by printing billions more //Rentenmarks// as it would have devalued the currency. The trade deficit continued to grow until temporarily leveling off during 1926 when the French government decided to pin the franc to the United States dollar (USD) and pound sterling (PS) (United States and British currency respectively). In order to keep French economy afloat, the Bank of France (a private institution) accumulated vast amounts of foreign currency until they owned nearly one half of the world’s foreign reserves comprised of USD and PS(6). This momentarily stabilized the Franc and the free fall of the French economy. However, when fears of the collapse of the pound sterling arose, (1928) the Bank of France attempted to quietly liquidate all the PS that they owned. The subsequent flooding of the market with the liquidated PS resulted in its drastic devaluation(7).  Naturally, to stop from selling the PS at less than the Bank of France (BOF) bought it, all liquidation began to slow. It was unfortunately too late for the BOF and when the PS collapsed the Bank was forced into bankruptcy and had to be saved by the French government. Under the terms the French government’s help, strict regulations were imposed on the bank. The BOF became, if not nationalized, heavily influenced by the government in 1929(8). To assuage now rapidly growing fears that the USD would collapse and bring the entirety of the French economy down with it, the BOF changed all of its remaining reserves from USD to Gold imposing a Gold standard, and profoundly contributed to the “global monetary contraction”(8) that caused the Great Depression in France and across the globe in 1930s(9).

As the past is prologue, it was possible to predict the impact of the economic downturn induced by WWI on society and culture in France. During the end of the 1910s and the beginning of 1920s there was a sharp upturn in liberal leaning moderate government and a shriveling of the socialist movement. In the 1919 elections, the hard-line socialists only won .8% of the 240 seats, a mere 2 seats total. The moderate republican and liberal groups won 218 seats whereas the hard-line right only won 20 seats(10). Little headway was made in economic and physical recovery of France and shortly after the 1919 moderate election, radicalism set in. Georges Clemenceau (the moderate liberal head of President Raymond Poincare’s cabinet) resigned on January 18 and Raymond Poincaré allowed Alexandre Millerand, a member of the socialist party, to choose the cabinet, which he naturally filled with socialist-leaning members(11). While socialism gained favor throughout the 1920s a crack began to form in the SFIO (the French Socialist Party) and the more radical portion broke to form the French Communist Party (FCP). The schism between the rich and the poor widened slowly but noticeably during this time into a chasm and the rural poor turned to Communism as a way to win the battle of “//les petits// against //les gros(12).”// Communists staunchly blamed WWI on the Capitalists, who they saw as a people obsessed with power that used the war to support their “lofty way of life”(13). The Communist party offered a disgruntled population an anti-war party that looked to unify the country and create equality between the classes. Effective propaganda by the communist party included a series of demonstrations and rallies mourning men who died in combat or from their war wounds. This allowed the party to establish itself as a dominant party on the left whose views could not be silenced by the Right or the Socialists in the late 1920s and 1930s(14).

With 7% of the French population as casualties and a swath of cultural and industrial rich land gone, the people of France turned to whatever party would listen. After the cloud of celebration of victory settled in 1920, there was a shift from the moderate right to the radical left, due, in part, to the fact that the moderate right was in power during the Great War and was blamed for the poverty and destruction following the war. The French economy underwent jarring changes during this time as governments and ideals changed. As the Pound Sterling collapsed, the French were forced to shrink the amount of money in circulation, and change all foreign reserves to gold(15). With the French moving to the Gold Standard, less money could be printed as every Franc had to be, at any time, worth a set amount of gold. This lead to a great contraction of lending, which not only prevented urban businesses from surviving, but also prevented rural farmers from being able to obtain loans for planting. Unemployment inevitably followed.  The newly unemployed farmers were forced to find what work there was building the Maginot line when construction began(16). Large percentages of the unemployed found little work and thus were much more easily swept up in the radical communist idea that every class could be equal and all men (idealistically) would have a job according to his ability, and be paid according to his need. The socialist movement in France had been around for decades before the 20s, but had never gained the support it did following WWI. So many people began to support the socialists in the 1920s that a faction by the name of the FCP had enough following to split and form a sleeping giant that would roar into life in the 1930s.

The opportunistic rise of socialism and communism was directly the result of the Great War and the devastation that it caused. This created a portion of society based, idealistically, on anti-militarism, anti-conservatism, and pro-nationalization of industry. All of the afore mentioned changes in economic and social France can be traced back to the draining effect that the Great War had on every aspect of French life, from industry to agriculture and from banking to politics.

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(1) "The Western Front 1914 - 1918." //The War Times Journal//. The War Times Journal, United States National Archives and the United States Signal Corps. Web. 1 Dec. 2009. . (2) Hautcoeur, Pierre-Cyrille. "Was the Great War a Watershed? The economics of World War One in France." Université de Paris I Panthéon-Sorbonne, 2003. Web. 01 Dec. 2009. pg. 19 (3) Ibid pg. 23 (4) Ibid pg. 25 (5) Ibid pg. 25 (6) China’s dollar trap? Lessons from France’s 1920s sterling trap. | vox - Research-based policy analysis and commentary from leading economists." //Front Page | vox//. Web. 01 Dec. 2009. . (7) Ibid (8) PInkney, David H. //Nationalization of Key Industries and Credit in France After the Liberation//. 3rd ed. Vol. 62. The Academy of Political Science, 1947. //JSTOR//. The Academy of Political Science. Web. 01 Dec. 2009. . (9) //Front Page//|//vox// (10) Pinkney, David H. (11) "Socialist Party, France - History of Socialist Party, France | Encyclopedia.com: Dictionary of Contemporary World History." //Encyclopedia - Online Dictionary | Encyclopedia.com: Get facts, articles, pictures, video//. Web. 01 Dec. 2009. . (12) Boswell, Laird. //Rural communism in France, 1920-1939//. Ithaca: Cornell UP, 1998. Print. Pg. 32 (13) Ibid pg. 54 (14) "Communist Party of France History Archive." //Marxists Internet Archive//. Web. 28 Nov. 2009. . This site was used only for expressing the views of the French Communist Party, not for empirical evidence, or any other type of factual information. It was used merely because no one knows the opinions of the FCP better than the FCP. (15) Boswell, Laird pg. 55 (16) //Front Page//|//vox// (17) Wall, Irwin M. //Teaching the French Popular Front//. 3rd ed. Vol. 20. //JSTOR//. Society for History Education. Web. 01 Dec. 2009. .

Works Consulted Boswell, Laird. //Rural communism in France, 1920-1939//. Ithaca: Cornell UP, 1998. Print. "China’s dollar trap?: Lessons from France’s 1920s sterling trap? | vox - Research-based policy analysis and commentary from leading economists." //Front Page | vox//. Web. 01 Dec. 2009. . "Communist Party of France History Archive." //Marxists Internet Archive//. Web. 28 Nov. 2009. . Hautcoeur, Pierre-Cyrille. "Was the Great War a Watershed? The economics of World War One in France." Université de Paris I Panthéon-Sorbonne, 2003. Web. 01 Dec. 2009. PInkney, David H. //Nationalization of Key Industries and Credit in France After the Liberation//. 3rd ed. Vol. 62. The Academy of Political Science, 1947. //JSTOR//. The Academy of Political Science. Web. 01 Dec. 2009. . "Socialist Party, France - History of Socialist Party, France | Encyclopedia.com: Dictionary of Contemporary World History." //Encyclopedia - Online Dictionary | Encyclopedia.com: Get facts, articles, pictures, video//. Web. 01 Dec. 2009. . Wall, Irwin M. //Teaching the French Popular Front//. 3rd ed. Vol. 20. //JSTOR//. Society for History Education. Web. 01 Dec. 2009. . "The Western Front 1914 - 1918." //The War Times Journal//. The War Times Journal, United States National Archives and the United States Signal Corps. Web. 1 Dec. 2009. .