We explain what the Hoover Moratorium was and what its objective was. Also, who proposed it and its consequences.
What was the Hoover Moratorium?
The Hoover Moratorium was a one-year deferral of reparations and war debt payments proposed by American President Herbert Hoover in a public statement on June 20, 1931. The objective of the moratorium was to alleviate the financial situation of European countries, especially Germany, in the context of the Great Depression that began in 1929 and ended. spread at the beginning of the 1930s.
Germany owed war reparations to the victorious countries in the First World War (1914-1918), while France and the United Kingdom had incurred war debts to the United States. The implementation of the Dawes Plan in 1924 and the Young Plan in 1929 made it easier for Germany to meet payments, but The outbreak of the 1930s crisis interrupted their ability to pay.
Hoover's proposal to postpone payments of reparations and war debts was accepted with some delay, so he could not prevent the economic crisis from deepening in Europe.
In 1932, a conference in Lausanne proposed ending German war reparations and reducing the debt of the United Kingdom and France to the United States, but the American Congress voted against it. When the term of the Hoover Moratorium expired, the payments established in the Young Plan became effective again but Germany could not meet its obligations.
Since France and the United Kingdom did not receive payments from Germany, they could not pay their debts to the United States in full. The German rejection of reparations contributed to the rise of Adolf Hitler in Germany in 1933who repudiated the Treaty of Versailles and officially refused to pay reparations.
Frequently asked questions
What was the Hoover Moratorium?
The Hoover Moratorium was a one-year deferral of payments for war reparations and debts incurred during World War I. Its objective was to alleviate the economic crisis that European countries were going through, especially Germany, in the global context of the Great Depression, and ensure that they could make payments once the moratorium ended.
Who proposed the Hoover Moratorium?
The Hoover Moratorium was proposed in a public statement by the president of the United States, Herbert Hoover, on June 20, 1931. It was developed together with a group of experts who considered that the economic crisis was related to the problem of reparations and debts. of war.
When was the Hoover Moratorium applied?
The Hoover Moratorium was proposed on June 20, 1931 but went into effect in December 1931, after its approval by the United States Congress.
What was the impact of the Hoover Moratorium?
The Hoover Moratorium could not stop the advance of the economic crisis in European countries. The United Kingdom, France, and Germany proposed at the 1932 Lausanne Conference to end German war reparations and reduce British and French debt to the United States, but the American Congress opposed it. Once the Hoover Moratorium expired, the German inability to fulfill its obligations facilitated Adolf Hitler's rise to power.
The historical context
After the German defeat in World War I, The Entente powers imposed war reparations on Germany. through the signing of the Treaty of Versailles in 1919. German difficulties in meeting payments caused conflicts such as the occupation of the Ruhr, a German region, by Franco-Belgian troops.
The economic crisis that followed these events led to the implementation of the Dawes Plan in 1924, which made it possible to stabilize the German economy and guarantee the payment of reparations based on a payment plan. In 1929, a new payment program was developed, known as the Young Plan, which was implemented from 1930.
However, the outbreak of the Great Depression beginning in 1929, which spread to much of the world in the early 1930s, interrupted Germany's ability to pay.
The consequences of the Hoover Moratorium
In the early 1930s, after the outbreak of the global economic crisis, US President Herbert Hoover was convinced by economic experts that A decisive factor in the crisis had been the problem of payments of reparations and war debts.. For this reason, on June 20, 1931, he proposed in a public declaration to postpone the payment of all debts between governments for a period of one year.
The Hoover Moratorium was accepted and implemented at the end of 1931. European governments considered this moratorium as American recognition that inter-allied debts (that is, between the countries that had formed part of the Entente during World War I) and war reparations owed by Germany should continue or end together.
At the Lausanne Conference, held in the summer of 1932, representatives of Germany and the Entente powers, with the exception of the United States, proposed an agreement on the issue of reparations and inter-allied debts.
This agreement proposed to conclude German reparations through a single payment of three billion marks and reduce the debts that the United Kingdom and France had with the United States. The proposal failed due to the refusal of the US Congress to any reduction or cancellation of the debts of foreign powers to the United States.
In theory this meant returning to the Young Plan. However, The reality was that Germany stopped paying reparations and the United Kingdom, France and other countries that owed debts to the United States continued with reduced payments, which were stopped when the US Congress refused to accept them.
Only Finland settled all of its international debts with the United States. In Germany, the economic crisis and the rejection of war reparations encouraged the rise of Nazism. Hitler was appointed chancellor in 1933 and since then refused to pay war reparations.
References
- Aldcroft, D. H. (2003). History of the European economy 1914-2000. Criticism.
- Britannica, Encyclopaedia (2023). Herbert Hoover. Encyclopedia Britannica. https://www.britannica.com/
- Cabrera, M., Juliá, S. & Martín Aceña, P. (comps.) (1991). Europe in crisis. 1919-1939. Pablo Iglesias Editorial.
- Sevillano Calero, F. (2020). Europe between the wars. The disrupted order. Synthesis.
