In prefaces to the other Books of this volume we have looked at the
outside world as background for the American scene in which Coolidge
moved. In the period following 1923-24, however, it seems well to present
developments in the United States as background for the whole world
picture.

We had retained our economic strength and financial stability, and above
all, our sound gold currency. The free gold of the world was coming to us,
because the outside world knew the gold would be returned without loss,
from the United States and from no other great country. On our financial
and economic policies, the rest of the world pivoted, even though we re-
fused to take international political responsibility. We had refused to
enter the League of Nations. Neither Harding nor Coolidge had the re-
motest conception of the immensity of our economic and financial power,
or of the extent of our responsibilities. We did accomplish a naval limita-
tion treaty in 1922. Our government did timidly and indirectly assist in the
making of the Dawes Plan in 1924. But the iniquities of the Versailles
Treaty, which we might have helped to ameliorate in time had we been in
the League of Nations, remained to poison the future.

The German inflation and general chaos continued pogressively worse
until the Dawes Plan of 1924. Under this Plan, Germany and the govern-
ments to whom she owed reparations undertook to restore German cur-
rency and credit, and to put Germany in a position to pay reparations. The
Plan had intrinsic merit. Its basic error was that scheduled payments were
much too high. But safeguards in the Plan under which transfers of pay-
ments should not be made provided that if the German currency or her
economic life were to be endangered thereby, then the accumulations of
reparation money in Germany were to be discontinued unless they could
be safely transferred. The fatal error came in the Young Plan which super-
seded the Dawes Plan in 1929, under which these safeguards were removed.

The nations of Europe which had borrowed from the United States
during the war undertook to refund their debts to us. Most of them ob-
tained heavy concessions in the settlements that were made, though Britain

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