Coolidge escaped in time. He was out of office before the final mad orgy
of the 1929 stock market in the United States, and before the heaviest
pressure began upon the debtor countries of Europe. But he lived, none
the less, long enough to see the collapse of a mad world.

Financial pressure began for Germany, and for most of the debtor coun-
tries of Europe, with the tightening of the money market in the United
States and the great reduction of foreign loans by the United States in
1929. Germany turned from borrowing to repaying in the middle of 1929.
and in the last half of that year developed an export surplus in so doing.
The Young plan was substituted for the Dawes plan in 1925, over Schacht's
protest against the abandonment of the protective clauses of the Dawes
plan. All debtor countries of Europe felt the tightening of the money mar-
kets.

The British stock market crashed at the time of the Hatry scandal, pre-
ceding our own stock market crash. Following our stock market crash, an
ominous price collapse came in almost all of the great international staples,
including especially farm products. But international confidence remained,
and in '30 another great German loan was placed under the provisions of
the Young plan. The depression of 1930 was relatively mild. It was more
severe in England than in the United States, because British costs and
prices were very inflexible and would not yield fast enough to prevent di-
version of trade from England to other countries. Debtor countries were
paying with goods. It seemed possible that the great mushroom of inter-
national credit might be sufficiently liquidated in this way. Then we raised
our tariffs in 1930, and the whole world began to raise tariffs and other
trade barriers to heights never dreamed of before, and the best intentioned
debtor struggled with difficulties.

In the spring of '31, a new factor entered. Austria and Germany, for
what seemed to them sound economic reasons, entered into a customs
union which involved a large measure of free trade between them. France
interpreted this as the annexation of Austria by Germany, and took violent
exception to it. Then and there international financial policies came to be
dominated by political considerations. France had become powerful finan-

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