Reconstruction and Finance

•Immediately after WWI the Rightist National Bloc won in the elections. Paul Deschanel defeated former Premier Clemenceau for the presidency. Deschanel later quit after he was found naked and babbling in a public fountain. Millerand took over as President and Aristide Briand became Premier.

Tremendous amounts of money were required for reconstruction in France. The government promised to pay for all damages incurred during the war. German reparations were expected to supply that money. Reparations were crucial to reconstruction as France had no money to spare. For this reason, Briand was driven from power in 1922 after he allowed Germany additional time before making reparations payments. Briand's reputation as a compromiser and conciliator was not what France wanted at this time. Former President Raymond Poincare took over as Premier and months later ordered French troops into the Rhineland for force the payments.
•Poincare was driven from office in 1924 due to disappointment with small reparations out of Rhineland, international condemnation for the move and Poincare's tax increases. Paul Herriot took over in a Leftist tide. Herriot faced three major problems left over from Poincare: 1) interest on the debt is huge 2) Enormous sums are still needed to rebuild France, 3) No real German reparations appear before 1926, and 4) taxes were still too low to balance the budget. By March 1924, the frand has lost over ¾ of its value.
• Battles over taxes. To save money, the government lowered the interest rate paid on new bonds. A lower rate meant fewer bonds were sold and this made the budget deficit even worse. To close this gap new taxes were proposed. The Left wanted to pass huge new taxes on the rich and to lower, even further, the interest rate on bonds. The Right wanted to pass broad-based taxes, sales taxes, and to lower government salaries and wages. With the narrow majority, the Left was unable to overcome opposition. With the problem continuing, Herriot suffered a "no confidence" vote in April 1925. The next 15 months saw six Premiers take office only to be removed a few weeks later as the budget impasse dragged on.

A financial crisis now developed. Uncertainty over how the impasse would be settled, or worse, never settled, sent the Bourse (French stock exchange) into a tailspin. To solve the crisis, Poincare was made premier and given almost dictatorial powers in finance to solve the crisis. It was so severe that party lines blurred as the French rallied to having some, any, direction to save the economy Using his new power, Poincare levied new taxes  on sales, and the bureaucracy was cut. Quickly, the budget was balanced and 1926 ended with a 1.5 billion franc surplus. By late 1926, the franc was not only restored, but was 30% higher than before the post war crises. Poincare was viewed as a national hero--sometimes even by his enemies.
• With the financial situation back under control, investors were no longer so afraid of inflation and this boosted the bond market tremendously. This new demand allowed the government to lower the interest rate on bonds. By 1928, the lower rates saved France over 300,000,000 francs per year. On top of that, the reconstruction of the devastated north of France, was practically finished. And, finally, the Germans began to pay reparations in 1926.

With France in such great shape, Poincare ran for reelection in 1928. Many observers expected him to lose owing to the jealousy of popular leaders in France. However, France brought back Poincare for another term with a big win. Good leadership under the Third Republic tended to be episodic and short, and when Poincare unexpectedly quit in July 1929 for health reasons France fell back into more confusion.

Problem in Alsace-Lorraine

Alsace-Lorraine was a problem after WWI in ways the French did not expect. Alsace-Lorraine became a political battleground for old and new issues. First, they lost their local governing powers they had enjoyed under the German federal system and fell under control from Paris. The Alsatians were quickly forced to learn French again as well as to only use French in official documents. Making things worse, the Alsatians had to undergo another Kulturkampf as they had to adapt to the Church-State rules France had adopted in the early 1900s. With the Leftist victory in 1924, nuns and priests were driven from the region as Alsace-Lorraine had to relive the Emile Combes years. However, the French Right was ready for this struggle, the Left did not want to refight an old struggle and the Alsatians put up massive resistance.  The Left relented and Alsace-Lorraine was allowed to keep their traditionally close church-state relations.  Anti-clerics promised to refight the issue one day as priests hoped for a better future for the Church in the rest of France. Alsatians were embittered by their experiences after their "return" to France and the region became a staunchly anti-Republican region as many suddenly decided the old Second Reich wasn't so bad. Later, when the National Socialists took over in Germany, the Alsatians proved very receptive to Hitler's appeals.

French Security Problems

• How to Replace Russia? One of the biggest problems facing France is the post-war world was how to replace Russia as the security linchpin for France. Since the early 1890s, France and Russia had been allies. Now, with the Reds in charge of Russia, there was little chance of friendship. Frenchmen hated the Communists for selling out to Germany and dumping millions of Germans into French laps in 1917-18. Plus, the Communists represented all the evils of Radicalism in French history (Reign of Terror, June Days, Paris Commune) and magnified them. Not only that, but Communists hailed those three examples of Radicalism versus Liberalism. Liberals were in charge of France and hating Radicals was a spectator sport (too bad there wasn't some way to ship off Lenin and the Communists to Devil's Island to eat bugs with all the other troublemakers). Obviously, there was little chance of a friendship developing here.
• Numbers not looking so good Another massive problem for France was numbers: France had 39 million people v. Germany’s 62 million. When you account for men of fighting age, Germany would soon have a 2-1 advantage. Since the 1880s, the population of France had remained at around 40 million. All efforts to encourage larger families had failed. France was doomed to numerical inferiority to Germany.
• Defeat on the Rhine. At Versailles, France demanded the entire Rhineland (the industrial heart of Germany) be annexed to France. The resultant loss of population and industry would forever prevent Germany from attacking France. However, the British opposed the idea for commercial reasons and Woodrow Wilson of the United States absolutely would not go along with it, "You will only create another Alsace-Lorraine!" he warned. With such opposition, France accepted the British idea of a demilitarized Germany--though very unhappy about it. However, Wilson talked about a "League of Nations"--an idea the French like as it would keep Britain, and most importantly, the US, in Europe in the event of a crisis with Germany. The problem was that neither nation would give a strong guarantee of support. As if that weren't bad enough the US finally dumped the League of Nations altogether.
• Some Successes. By 1920, France did manage to succeed in getting military cooperation with Belgium. This solved a major problem as a neutral Belgium invited future German attack. In February, 1921, France signed an alliance with Poland. It was hoped the Poles could partially replace lost Russian support to the east of Germany. However, this alliance only angered both Germany and Russia who viewed Poland as "temporary." From 1924 to 1927, France signed treaties of alliance or friendship with Czechoslovakia, Rumania, and Yugoslavia. These nations were no substitute for the Russian bear, but they were useful in containing the Germans. The big prize came in 1925 with the Treaty of Locarno. Germany agreed with France and Belgium that she would not alter those borders in the future. Eastern Europe (Poland, Czechoslovakia etc) were not so safe, but the Germans gave up on getting back Alsace-Lorraine. Britain and Italy officially promised to help France in case of a German attack. Locarno reinstated Germany as a member of the family of nations. The good feelings coming out of this deal helped France and the struggling Weimar Republic. It looked like a permanent peace was possible after all. And who was the mastermind of all these diplomatic successes? None other than Aristide Briand (who settled the nasty Church-State battles of the Emile Combes era).
• Briand Rejected as President. Many in France decided that the Third Republic needed firm leadership and they persuaded Briand to run for President in 1931. But, this is still France, and the Assembly rejected him. Republicans seemed committed to choosing fools over statesmen.

Depression and unrest

• The Depression hit France in 1932 and the Radical Socialists under Herriot took over in a coalition government. In May, 1932 Albert Lebrun takes over as President after Doumer is assassinated. The Franc was overvalued and this hurt the French economy. To solve budgetary problems, the Left wanted to print money and no longer increase taxes or cut government. The Right opposed this as it would cause tremendous inflation. A nasty impasse developed. It got so bad that five Radical Socialist Premiers were dumped from June, 1932 to January, 1934
• Stavisky Affair. Into this worsening situation comes the most explosive affair since the infamous Dreyfus Affaire. (see handout on Scandals of the Interwar Era “There they go again”). Edouard Daladier took power in early 1934
• February 6, 1934 Riots dump Daladier. Gaston Doumerge takes over and gains political harmony, but blows it when he wants the constitution amended to give him the power to dissolve parliament. He gets the boot in November, 1934
• Revolving Door begins anew…Four new, short lived governments happen. Flandin, Bouisson, Laval and Sarraut all get a chance to rule
Fear of Fascism prevents necessary strengthening of the Third Republic
• After seeing what had happened in Italy, Germany, Russia and other nations, the democratic forces in France would not give stronger powers to anyone.
• As a result, the needed reforms never occurred, but the Left was too worried to take a chance.
Anti-Democratic groups proliferate
• Quasi-Fascist groups like the Croix de Feu, royalists like Action Francaise and Camelot du Roi, and nationalist groups like the Jeunesse Patriote all grow as the Third Republic stumbles from crisis to crisis.

The Popular Front

• Throughout the 1920s and early 1930s, Stalin ordered Communists to direct all of their attacks on Social Democrats. Continuing Lenin’s practice of attacking fellow Leftists, the Communists continually refused to make common cause with their fellow Reds. This all changed after Adolf Hitler became Chancellor of Germany in January 1933. Stalin decided that Hitler and Mussolini’s right-wing socialism held the promise of stopping Communism from spreading. As a result, Stalin ordered the Communists to stop all attacks on Social Democrats and Liberals and to direct their attacks in an “anti-Fascist” front. Since Liberals, socialists and Communists all claimed to represent democracy and the “people,” this new coalition was called the Popular Front. This was always an uneasy alliance, especially between socialists and Communists. Stalin took care of the problem of being criticized, however, the creating the battle cry of, “No Enemies to the Left!” This meant that criticism could only be toward those more conservative. This meant of course, that the Communists, being the most Left party of them all was above criticism. Criticizing anyone to one’s Left was a sign of being a “closet fascist.” As such, Liberals could attack Hitler, but not Stalin.
• In France, this paved the way for the June 1936 victory of the Popular Front led by socialist Leon Blum. In short order, the PF enacted wage increases, a forty hour work week, holidays with pay, and collective labor contracts all given to workers. Parliament later gave government the power to decree mediation and arbitration in industrial conflicts. Causing conflict among the coalition was the nationalization of some military industries, government control of the Bank of France and price-fixing with wheat. Liberals swallowed these laws in order to keep French fascists from killing democracy all together.
• Blum made a big mistake when he ordered the Bank of France to cut the value of the franc by 30% in the hope of drawing investment money back to France. The move failed as investors were jittery about investing in anything that might be nationalized by the PF. Soon, bonds could not even get their face value on the open market and the budget became unbalanced and the crisis of the franc returned. To face the crisis of the franc, Blum wanted the near-dictatorial powers given to Poincare in 1926. It passed the Chamber of Deputies, but the Senate refused. Blum was forced to resign.
• Camille Chautemps (a Radical Socialist) takes over…He wanted to keep the same policies as Blum, and the Socialists supported him and took jobs in the Cabinet. The Communists supported him, but refused any official duties. Chautemps got the powers denied Blum in August 1937. However, the Franc dropped to record lows anyway. Chautemps was no Poincare. In late 1937, the franc continued to drop.
• Death of the Popular Front—Jan 1938. Socialists bail on the Radical Socialists after the RS won’t go for a controlled foreign currency to solve the disaster of the franc.

Weakness in the Face of Nazi Germany

• Many reasons for weakness toward Germany. First France is still nervous over the very negative reaction from Britain and the US over the Rhineland occupation. Second, France is jittery about facing Germany alone and does not yet trust the League to protect them. Third, the French right increasingly becomes sympathetic to fascist ideas as a way of getting rid of the Third Republic, and don’t want to take on Hitler just yet. Fourth, the instability of the French Cabinet with seemingly constantly changing ministers prevented France from following a consistent policy. Finally, pacifism had taken root in France to a great extent and it precluded firm action against Germany.
Anschluss shocks France into stability
The 1935 German move into Austria to unify the two nations in Germanic superstate greatly frightened France. Not only did it make for a much larger Germany. It also signaled that Italy was now to make a deal with Hitler. Losing Italy to the German side was a terrible blow for France. It was so severe, that the petty squabbles and no-confidence votes declined greatly to create greater stability in the French government. This eventually resulted in Edouard Daladier’s return to the Premiership of France.
Maginot Line and defensive mentality limit French options as Hitler marches on
Though Daladier was now in charge of a more-stable French government, he was handicapped by the French military itself. The great shock of WWI had created a defensive mentality in the French General Staff. The great generals had all cut their teeth on defensive war, while the pacifist feelings among the French public meant that keeping casualties low was to be emphasized. As a result, France had no operational plans to mount an offensive against Germany. In the event of a future crisis, the French army would merely remain in France. Making this easier was the massive line of fortifications called the Maginot Line. The greatest fortifications in history of the world, the Line used all the lessons of WWI about defensive warfare. When the next war came, the German army would break their heads against the Line and France would keep her casualties low.
At the same time, the French military was backward looking. The generals were very reluctant to spend money on tanks, aircraft and anti-tank weapons. The great WWI generals had not needed such weapons. In some years, the French military simply did not spend all the allotted money on tanks and aircraft, but invested heavily in the cavalry. Finally, the French Colonel Charles de Gaulle was a world-class thinker on mobile warfare and especially the use of tanks. For this, he was viewed as a threat by the old generals. In addition, he was viewed as too conservative in his politics by the Republican generals and his career was hindered greatly. On the other hand, de Gaulle’s books had great influence among German military thinkers.