Austrian Reconstruction and the Collapse of Global Finance, 1921-1931

Book excerpt: Through an archive-based study of the political and financial history of the 1920s, this book examines how and why international capital teamed up with the League of Nations to bail out the Austrian state after the First World War, and what consequences the intervention carried for Austrian politics and finance. While the existing literature on the League of Nations sees the organization's intervention during the 1920s as mostly positive and successful, Austrian historians decried it as a financial dictatorship that ended in disaster. In contrast, the book claims that while the League of Nations' involvement was essentially responsible for terminating Austrian hyperinflation in 1922, its representatives remained largely immobilized in Vienna, with the Austrian government in control. The League ceased its involvement Austria in 1926, though aware of the latter's financial and political instability. The subsequent collapse of the Austrian Credit-Anstalt bank in 1931, however, was successfully contained with international help within just a few weeks. Thus, it could not have triggered and was not responsible for the larger European banking panics in Germany and Britain that summer.--