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Is it realistic to imagine Bismarck not claiming Alsace-Loraine after the Franco-Prussian War? I mean, he had been fairly tolerent towards the Austro-Hungarians when it came to the terms of the peace that ended the Austro-Prussian War. Could he have done the same with France?

Yes, Austrians were Germans etc., and France was Germany's traditional enemy, but could Bismarck have been smart about the whole issue?

After that, there's the second sort of issue to consider. What would the effects of Bismarck not claiming Alsace-Loraine, and to some extent just having a nice set of peace terms for the end of the Franco-Prussian War been? Could it have come out with France friendly to Germany? Or at least neutral and not obsessed with revenge?

I wrote a paper on the topic of how good terms for the French at the end of the Franco-Prussian War would have changed history as part of my application to the University of Michigan Honors College, in response to their question of what time period would you go back to if you could travel back in time, and what would you do. I argued that World Wars One and Two might have been avoided if Bismarck had given nicer terms and not pissed off France, and they bought it and let me in, so I guess it has some merit. But the question remains, both how likely was it that Bismarck might give good terms to the French, and that that decision might lead to sufficiently better relations between France and Germany that the World Wars could be averted.

Well, what are your thoughts?
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