In January 1931, the French government of Theodore Steeg collapsed and Pierre Laval came to power.
I'm chiefly interested in two international impacts of France under the Laval government, during the Great Depression:
1. The Creditanstalt collapse. In May of 1931, it was revealed that the Creditanstalt (a large Austrian bank) was almost bankrupt, threatening a world financial crisis, resulting in negotiations for an international loan to bail out the bank. As Prime Minister, Laval demanded diplomatic concessions in exchange for this loan (in particular, renunciation of a possible German-Austrian customs union.) Instead, this ended up killing the negotiations which essentially fell through - the Creditanstalt collapsed, and the crisis rapidly spread worldwide (including to Hungary, Britain, etc.)
2. Laval strongly supported the gold standard, policies of deflation, and accumulation of gold reserves - French reserves soared from 7% to 27% of world gold reserves between 1926-1932. As a result, the French GDP stagnated. Moreover, it's been argued (e.g. here) that the French policy greatly exacerbated the Depression worldwide.
What I'm interested in is:
- If it's possible to avoid a Laval government of 1931, and have a more far-seeing and less nationalistic government in power during that period that recognizes the importance of the Creditanstalt enough to result in a successful bailout. Considering the impact of the Depression on France, not to mention Nazi occupation, France came off far far worse thanks to this short-sighted policy.
- If it's possible at all to change French policy during this period regarding gold reserves and the gold standard (probably less likely.)
- If true, how much milder would the Great Depression be worldwide, and what would the consequences be? (Almost certainly no Nazi Germany, for one thing.)
Disclaimer - I know pretty little about French political history during this era.
I'm chiefly interested in two international impacts of France under the Laval government, during the Great Depression:
1. The Creditanstalt collapse. In May of 1931, it was revealed that the Creditanstalt (a large Austrian bank) was almost bankrupt, threatening a world financial crisis, resulting in negotiations for an international loan to bail out the bank. As Prime Minister, Laval demanded diplomatic concessions in exchange for this loan (in particular, renunciation of a possible German-Austrian customs union.) Instead, this ended up killing the negotiations which essentially fell through - the Creditanstalt collapsed, and the crisis rapidly spread worldwide (including to Hungary, Britain, etc.)
2. Laval strongly supported the gold standard, policies of deflation, and accumulation of gold reserves - French reserves soared from 7% to 27% of world gold reserves between 1926-1932. As a result, the French GDP stagnated. Moreover, it's been argued (e.g. here) that the French policy greatly exacerbated the Depression worldwide.
What I'm interested in is:
- If it's possible to avoid a Laval government of 1931, and have a more far-seeing and less nationalistic government in power during that period that recognizes the importance of the Creditanstalt enough to result in a successful bailout. Considering the impact of the Depression on France, not to mention Nazi occupation, France came off far far worse thanks to this short-sighted policy.
- If it's possible at all to change French policy during this period regarding gold reserves and the gold standard (probably less likely.)
- If true, how much milder would the Great Depression be worldwide, and what would the consequences be? (Almost certainly no Nazi Germany, for one thing.)
Disclaimer - I know pretty little about French political history during this era.