The war had equally profound effects on patterns of international trade and finance. The united states supplied vast quantities of Allied war material and financed this through Lend Lease. In spite of this largess, Britain liquidated its foreign reserves and large portions of its overseas investments to pay for imports from the United States. By the war's end, the pattern of British trade deficits financed by U.S. capital was firmly established. In addition, the rupture created by military operations made reestablishing prewar trade practices difficult. This was most evident in central and eastern Europe,where Soviet control served to remove this area from its traditional role in European trade. Added to this was the physical destruction of the war,which represented approximately 13 percent of the prewar capital stock in Germany and 8 percent in France. The result was a high demand for imports, significant barriers to exports,and a substantial payments imbalance between Europe and the United States.
The war and depression 1930s also had psychological and political consequences that influenced economic choices. The fear of recurrent depression helped reinforce affirmative government action in guaranteeing domestic prosperity. The depression left a legacy of significant barriers to trade and a memory of the dangers of economic warfare. More ominous were the German and japanese experiences of military and economic organization designed to obtain secure access to the resources needed for autarchy. Finally, the military outcome not only disrupted traditional European trade but brought a politically and economically alienated great power the soviet union into the heart of Europe.
The war had equally profound effects on patterns of international trade and finance. The united states supplied vast quantities of Allied war material and financed this through Lend Lease. In spite of this largess, Britain liquidated its foreign reserves and large portions of its overseas investments to pay for imports from the United States. By the war's end, the pattern of British trade deficits financed by U.S. capital was firmly established. In addition, the rupture created by military operations made reestablishing prewar trade practices difficult. This was most evident in central and eastern Europe,where Soviet control served to remove this area from its traditional role in European trade. Added to this was the physical destruction of the war,which represented approximately 13 percent of the prewar capital stock in Germany and 8 percent in France. The result was a high demand for imports, significant barriers to exports,and a substantial payments imbalance between Europe and the United States. The war and depression 1930s also had psychological and political consequences that influenced economic choices. The fear of recurrent depression helped reinforce affirmative government action in guaranteeing domestic prosperity. The depression left a legacy of significant barriers to trade and a memory of the dangers of economic warfare. More ominous were the German and japanese experiences of military and economic organization designed to obtain secure access to the resources needed for autarchy. Finally, the military outcome not only disrupted traditional European trade but brought a politically and economically alienated great power the soviet union into the heart of Europe.
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