This article describes the immediate prelude to World War II. In summary:
- The peace set up by the Treaty of Versailles at the end of World War I was extremely shaky, with far too many new countries which all acted in their own narrow (economic) self-interest—this meant that the continental economy was slow to recover from World War One, and ensured that the Great Depression hit extremely hard, since every country suddenly adopted protectionist policies to insulate their own citizens from the economic crisis. Ironically, the adoption of these policies by virtually all of Europe's governments actually made the whole thing much worse. Germany, Austria, Hungary, and Italy in particular were very unhappy with the way post-war Europe had turned out, but that base discontent was largely forgotten as the European economy finally recovered in the mid-1920s.
- The economic depression caused by the war and the post-war demobilisation led to a wave of revolution sweeping Europe from the last months of the war until about 1923, when the Russian Civil War finally ended with Red Victory. By that time, militant Fascism had evolved and been used by largely Authoritarian and anti-liberal governments to suppress the socialist and communist movements. Fascism fades away for a while as Europe prospers during the 1920s, but returns stronger than ever before as The Great Depression hits and socialist and communist movements come to the fore again. This time, however, the Fascists are around to stay; all of Europe's nation-states bar those of Scandinavia, France, Switzerland, the Lower Countries, and Britain are dictatorships by 1939 note and every single one of these governments either make use of or are run by Fascist parties.
- Meanwhile, China disintegrates even further as the 'Anhui' clique of The South and along the mid-lower Yangzi river splits from the 'Zhili'/Beijing Clique. This gets even worse when Zhang Zuolin of Manchuria and Yan Xishan of Shanxi also split from the Zhili Clique to form a new 'Fengtian Clique'. Sun Yat-sen/Sun Zhongshan founds a 'New Guomindang' in Guangzhounote but dies in 1925. Chiang Kai-Shek/Jiang Jieshi succeeds him, and pre-empts the plans of Wang Jingwei and the Guomindang's left wing to destroy the party's right wing in a bloody purge in 1927, which leads to China's socialist and communist parties going underground. Despite having nominally unified the country by 1928, the Guomindang is still weak, however, and it takes a full decade of near-constant warfare and politicking before the Guomindang is finally strong enough (in 1937) to be capable of taking on all the Chinese factions simultaneously and surviving. Throughout this 'Nanjing Decade' the struggle against socialism has largely been an excuse for taking down individual warlords and building up the Guomindang's power-base in preparation for what looks like an inevitable war with the much-more-powerful Japanese Empire, which keeps nicking bits of Chinese territory.
- Japan experiences a shift towards democracy in the immediate post-war period, but this is limited as the Japanese constitution is based on that of Imperial Germany and is thus designed to prevent civilians from holding any real power. This becomes apparent after the accension of the military fanboy, the Showa Emperor Hirohito, in the 1920s, especially once The Great Depression hits Japan hard and extremists begin assassinating government officials who are deemed insufficiently patriotic. By 1930, the country is a ethnonationalist military dictatorship ruled by a faceless and constantly-changing Army-Navy junta that doesn't really understand economics and thinks it is necessary to carve out bits of China (while the country is still weak and divided) to make a 'captive market' for Japan to buy raw materials from and sell manufactured goods to. The Army in particular increasingly sees taking on China as a 'now or never' thing, and they are probably right to think that, as the Guomindang might actually become strong enough to win a defensive war against them within another decade.
- In 1933, a party modeled on Benito Mussolini's Fascist Party, the NSDAP, comes to power in Germany and declares a state of emergency, securing special powers for itself and turning the country into an anti-socialist dictatorship. The party's leader, Adolf Hitler, begins a ludicrously over-extensive program of re-armament that, despite greatly reducing unemployment and poverty in the short-term, would actually—if unchecked—result in a general collapse of the German economy in about 1942 or so. As it is, however, the somewhat-delusional but charismatic demagogue turns his attention to enhancing German prestige and general expansionism. Just how insane Hitler actually is is not made clear until his diplomatic maneuvers in 1938 and 1939, by which time the Franco-British re-armament programmes are in full swing. However, the Allies still have a decisive (2:1) commercial-industrial and manpower advantage over the NSDAP's Germany, so it's pretty clear who will win.
- In 1936, the populist Socialist-Communist-Anarchist coalition won the Spanish General Elections for a second time, after a brief period of being in opposition, since the country's weak military-dictatorship was toppled by a revolution in 1930 that had been organised by all the non-fascist parties working together. The Coalition is (by default, since they can't agree on anything else) anti-Catholic and anti-Monarchist, and the right wing and fascist parties capitalise on this. The military, whose leadership remains unchanged since 'the good old days' of the Primo de Rivera dictatorship, organises a coup to make the country a military dictatorship again. They are discovered and race to implement their incomplete plan before they can be caught and executed for treason. The result is the Spanish Civil War, with the Coalition on one side as 'The Republicans' and the Monarchists/Catholics/Military on the other as 'The Nationalists'. Germany basically gives the Nationalists, led by Generalisimo Francisco Franco, everything they need to win, from Aeroplanes to Tanks to loans, whereas the Soviet Union bleeds the Republicans dry for all the assistance they buy from them—unsurprisingly, The Nationalists winnote .
- Afterwards, Hitler begins making territorial demands, including reuniting Germany with Austria in a move called the Anschluss and annexing the Sudentenland (part of Czechoslovakia). Initially, the Allies give him what he wants, but after Hitler breaks his promise to not annex the rest of Czechoslovakia and makes further claims on Poland, they warn him that continuing will mean war. When Germany invades Poland anyway, Britain declares war on Germany and France makes an uninspiring declaration of war on Germanynote as well. Hitler and ordinary Germans alike are shocked and dismayed that the Allies have declared war upon them, but many Frenchmen—like Marshal Philippe Pétain, a popular WWI hero—also feel that Poland and Britain have forced France into a pointless and avoidable war that is not in France's interests at all...
The roots of humanity's greatest conflict go back centuries, but the immediate causes of this war lie in the resolution of the First World War and in The Great Depression.
November 1918: At the eleventh hour of the eleventh day of the eleventh month, the guns fall silent and everyone breathes a sigh of relief that The Great War has ended. The sigh of relief is justified: more than ten million soldiers were killed over the course of the four-year war (more soldiers died than quite a few countries had people), in addition to more than seven million civilian deaths and uncounted numbers of civilian and military wounded. These catastrophic death tolls resulted from military technology outstripping military thinking. The application of 19th-century tactics to 20th-century weapons led to a horrifying learning curve featuring many long, indecisive and horrendously inefficient battles. Even the battles that happened after the sides had learned were on scales few could imagine before the war.
The collapse of the German and Habsburg empires after the war led to the creation of many 'new' states and the re-drawing of borders all over central-southern Europe. The Habsburgs' dual-monarchy of Austria-Hungary was divided into German Austria, Magyar Hungary, and Czechoslovakia (a union of the Czech and Slovak peoples, with large minorities of Germans and Hungarians). Substantial chunks also went to Yugoslavia (a pan-Slavic union led by/under Serbia, which had been independent prior to the war) and Poland (most of which was taken from Germany and Russia). Italy and Romania received Austrian Trent and Hungarian Transylvania, respectively. Germany itself became a democracy (with numerous inner conflicts due to the spread of communism throughout Europe after the Russian Revolution and military coups) and lost some land to Denmark and a large chunk to Poland. Alsace and Lorraine went back to France ('Again', after a fashion. Nominally 'German' and 'French' people had been fighting over this region since before the modern nation(-state)s of Germany or France existed). Germany also lost all her overseas colonies, which had been economically useless but nonetheless a great source of national pride before the war.
The creation of the 'new' states and the redrawing of national borders left German minorities dotted all over central-eastern Europe. What was more, in some areas bordering Germany and Austria they were actually majorities, such as in now-Italian Trent (in the modern province of Alto-Adige/SüdTirol) where the Italians had rigged the League of Nations census in their favour to obtain a natural border with the Alps. All this would be important later. In the meantime, Austria, Hungary and Germany had their armed forces heavily regulated, were required to pay heavy reparations to the Allies and were forbidden from any kind of political union with one another. It is debated as to how harsh these reparations were and what their role was in the later economic collapse. While initially high, they were greatly reduced in the intervening decades, and much leeway was given to the Germans in how and when to pay them. This is in addition to the fact that, in practice, the reparation payments were for the most part all but ignored, with the Germans often simply refusing to pay.
Nevertheless, many Germans considered the treaty an unforgivable national humiliation and continued to believe that Germany could have won the war, or at least could have avoided making such concessions had it been settled by soldiers on the battlefield and not the politicians. A "stab in the back" myth of betrayal grew up around the treaty of Versailles, centered on the incompetence and gutlessness of the German leadership, the betrayal of the German Socialists in abandoning all claims of international workers' solidarity to support the government's unwanted war, the Liberals and Democrats for screwing up the economy in the post-war period, communists and their sympathizers who were alleged to have infiltrated German industry and deliberately sabotaged war production, as well as the all-too-familiar scapegoating of the Jews. Anything and anyone to justify the "real" cause of their defeat and avoid the conclusion that apparently, against all logic, Germany had been bested, something that did not sit well with the Nationalist and Social Darwinist theories popular at the time.
The monetary cost of the war is literally incalculable; while Russia dodged its bill entirely by becoming a whole new country, the average cost to European human capital was about 6%, domestic assets about 11% and national wealth some 10-20%. Worse still, the 'Spanish 'flu' Pandemic of 1918—the spread of which, among other diseases, was greatly aided by the mobilisation of so many troops—more than doubled the total loss of European human capital over the period 1914-1919.
Furthermore, the conclusion of the war and the creation of so many new states along national lines resulted in Europe spending most of its time grappling with great political unrest instead of addressing the fundamental structural economic problems which underpinned much of said unrest. Almost overnight, Europe went from a handful of currencies with fixed exchange rates to over a dozen currencies with variable exchange rates. Where there had been a handful of tariff barriers and taxation systems before, now there were dozens.
Germany, the biggest economy of pre-war Europe, was deliberately weakened, saddled with war-reparations debts, and alienated by Britain and France—who would've needed Germany onside if they had wanted to 'manage' Europe properly. London had managed the world's prewar commerce and trade; now, the situation was too complex and London too weak for it to exert any real control, and New York (which had begun to rival it for size) refused to step up to the plate and help, or take charge of the situation itself. Furthermore, the war had disrupted the natural trade cycles of Europe, and the re-gearing towards peacetime industries resulted in mass unemployment, giving impetus to various movements through much of Europe.
Meanwhile, the 1923 Washington Naval Treaty puts strict limits on battleship sizes and numbers in an attempt to stave off another ruinously expensive naval arms race like the one that preceded World War I. Unfortunately, the treaty also reveals growing rifts between former allies, as the Japanese (who joined the Allies to stay on Britain's good side, and to take German possessions in Shandong and the Pacific) are deeply offended by the US and British insistence that the Japanese fleet be held to 60% of either of theirs—the so called 5-5-3 ratio—which they see as a grievous insult on-par with the latter's rejection of a Universal Declaration of Racial Equality in the League of Nationsnote . The Japanese are allowed near-parity in the so-called 'aircraft carrier' ships—an experimental ship-type that serves as mere landing strips for aircraft—because of the minimal threat that they pose. Aircraft may be good scouts and spotters, after all, but they have no fighting capabilities.
The Treaty of Versailles also set up the League of Nations—a kind of proto-United Nations, where all states could gather and discuss their problems, solve them diplomatically and enforce international treaties. However, the United States did not join—ironic, given that the League was conceived by the country's President Woodrow Wilson. Wilson himself was responsible for the USA not becoming a founding member of the League. He refused to accommodate his domestic political opponents in the process of creating the league and when trying to have the USA's membership thereof later ratified at homenote . The US's continued non-involvement was officially because the US did not like the idea of becoming an Imperial Power (with capitalisation and accompanying bad connotations) with 'foreign entanglements'.
The non-involvement of the US was crucial, as the United States accounted for a fifth of world GDP at the time; this was a touch more than Britain, France, and their Empires and Allies combined. Furthermore, the new state of the Soviet Union was refused entry because they were a poor and backwards country of Dirty Communists to be despised by all civilized peoples. As a result, the League's success and implementation was limited. Despite this, the Allies were satisfied with their work and went home, each confidently declaring that there would be no more war.
They were wrong. Unemployment and under-employment combined with inflation and transportation problems to leave millions of post-war workers short of their daily bread. Consequently, Europe was swept by revolutionary fervor inspired by the example of the Soviet Union as communist parties tried to seize power in Germany, Italy, Hungary and elsewhere. The confusion and loss of control that came with suddenly giving the vote to millions of now-hungry people who had never been involved in politics before—in the name of democracy and freedom, of course—looked to have backfired spectacularly. For a period of time, it seemed as if the World Revolution, so long foretold, might actually be at hand. But to the Marxists' disappointment, many working professionals and skilled workers turned to fascism, a movement which combined mass-politics, dictatorship and nationalism with socialist attitudes to the community and welfare. Fascism was touted as a revolutionary new movement, a 'Third Way' between the evils of fully-fledged International Communism and the chaos of the beleaguered (and apparently economically ruinous) liberal democracies.
Political elites proved willing to compromise with these new movements or institute their own dictatorial regimes to stave off the advances of 'The Red Hydra'. This political environment allowed the Partito Nazionale Fascista (the National Fascist Party, or PNF for short) to come to power in Italy in the early twenties, setting a precedent for the rest of Europe. It was over a decade later that one of history's (least) favourite and most exclusive parties, the Nationalsozialistische Deutsche Arbeiterpartei (the National Socialist German Workers' Party, better known as the Nazi Party or NSDAP for short), came to power in Germany by similar means. Under the leadership of the charismatic demagogue (and frontrunner for the title of "Most Evil Painter Ever") Adolf Hitler, the Weimar Republic was reformed out of existence. Germany then set about violating every remaining provision of the Versailles Treaty, rearming its military and (after five years of testing the international waters) joining with Austria in a move called the Anschluss (joining) to create a unified German state in 1938.
Fascism is central to World War II, however it is a topic that people know surprisingly little about. The first enigma is the name. The term fascism comes from the Roman "fasces", a symbolic bundle of sticks with an axe buried in the middle. The Romans used the fasces as a symbol of unity. The individual sticks could be broken easily, but when bundled together, they were strong. The axe symbolized both strength, and a power over life and death (as well as being just a general symbol commonly used by the Greeks). Fascism was born initially from socialism note but over time it lost most of its socialist qualities. Indeed, even the fascism adopted by Benito Mussolini was radically different than the very original, which was advocated in The Fascist Manifesto. For example, Mussolini was decidedly anti-democratic note while the original Manifesto had advocated for universal suffrage. Really, the only defining principle of fascism that stuck since the beginning was corporatism, an economic model that was more akin to light forms of anarchism or syndicalism initially, but gradually devolved into the Nazi model in which the government closely cooperated with and coordinated private businesses to help accomplish their economic goals.
What we know as fascism, however, wasn't dreamed up until the 1920s. A veteran from World War I named Benito Mussolini came up with the concept after being ousted by the socialists upon returning home. The socialists had kicked out Mussolini due to his support of the war, which the socialists were firmly against. The war had warped his own radical socialist beliefs. He had always been against democracy and believed that a dictatorship would be far more effective, but the dictatorship he supported went from being a proletariat one to a nationalist one. He started to see socialism as a failure, and believed that national identity transcended any loyalty to a specific class.
Benito Mussolini formed a new fascist party, but it was less a civilian political party and more a violent paramilitary movement. They became known as blackshirts, as Mussolini had them dress in black uniforms like the Arditi, the elite mountain troops he served with in World War I. On October 22nd, 1922, Mussolini and the blackshirts marched on Rome and demanded the resignation of the prime minister and the creation of a new fascist government. King Victor Emmanuel III demurred to their request and the fascists took power. note Mussolini was appointed the new Prime Minister, and he quickly got the legislature to give him emergency powers, starting his dictatorship. Over the next few years, he started to dismantle Italy's democracy and place himself at the head as Il Duce. By 1927, nothing remained of Italian democracy, and Mussolini was the sole ruler of the state, with his blackshirts enforcing his authority by any means necessary.
The fascism dreamed up by Mussolini by this point can be summarized like this: it dismissed liberal democracy as being weak and ineffective, and called for elite, dictatorial rule. It heavily promoted socially conservative—if not outright regressive—attitudes. To this end, women were recalled from the workforce and relegated to a life of submissiveness in the home, where their own job was to rear children to turn them into young men. Those young men also had only one job: to sacrifice for the well being of the Italian state. In most cases this meant joining the military. In fascist society, you were only as good as your ability to support the nation, and people became a resource. Strict class systems were in effect again, and daily life became very regimented. Economically fascism is defined as corporatist, but economics are not essential to the system. Any kind of economy is fine as long as it benefits the state, although the state should still have strict oversight and control of the economy if need be. Irredentism, a belief in the need to incorporate territory that was considered to have once belonged to the nation, was heavily promoted, and the movement generally had a reactionary outlook, turning to the past for answers and rejecting the future. To this end, the Italian fascists believed in restoring a glorious Roman Empire with Italy at its center, but this vision of the Roman Empire was really just a gross caricature invented by irredentist propaganda. Finally, and most importantly, there was a strong belief in Social Darwinism. This belief was central to fascism, and the Nazis would take it to its logical extreme later on. It is essentially an attempt to apply Darwinist principles to nations and peoples, believing in a "survival of the fittest" outlook where all nations, peoples, and "races" were vying for dominance over the globe. Thus, in order to ensure a utopian existence, the most "fit" race or nationality had to succeed in subjugating the others. Moreover, there was an idea that nations could "evolve" in a sense. Because of this, Mussolini did not support the idea of peace, and believed that nations must be in a state of unending war to weed out their weak members and leave only the strong.
Social Darwinism is, of course, a pseudoscience born of a gross misunderstanding of actual Darwinism. It seems to mix up the idea of "survival of the fittest" with the idea of "survival of the strongest". What separates the two is that "fitness" is not defined in terms of raw strength, but one's ability to adapt to their specific niche. Different species evolve to better fit different environments, thus true Social Darwinism would promote the idea that nations and peoples adapt to different environments.
Unfortunately, the fascists didn't get the memo, and these ideas started to become popular throughout Europe, particularly with another war veteran by the name of Adolf Hitler. He had been assigned by the military to infiltrate the German Worker's Party, the DAP. However, he started taking a liking to one of its members, and slowly he was pulled in. The party changed its name to the National Socialist German Workers Party, the NSDAP. Now-a-days, we call them the Nazis. Hitler joined the party after leaving the military and even designed the characteristic swastika arm-band and flag. Nazism at this time was not a well-defined concept. The party became less defined by what it supported, and more defined by what it was against. It was staunchly against Marxism, despite being called the German Worker's Party. Hitler himself let his anti-Semitism shine through early on during his many speeches.
Hitler caught wind of Mussolini's "March on Rome" and hoped to do something similar in Germany. To that end, he adopted fascism as the NSDAP's official ideology and tried to organize an uprising in Munich, which came to be known as the "Beer Hall Putsch". The coup was quickly put down by the police. Hitler was arrested and spent a year in prison, where he dictated his manifesto, Mein Kampf, to Rudolf Hess. The book firmly established Nazism as a political ideology. Nazism borrowed heavily from fascism, but it placed an even stronger emphasis on the idea of race as being a defining factor. Nearly everything in Hitler's worldview boiled down to racenote . Hitler believed Germany lost World War I due to weaker races conspiring to undermine it. Hitler believed the Weimar Republic was weak because it allowed these weaker races to exist. He saw the world as a duel between races, all struggling to reach the top, and he believed that the so called "Aryan" Germans were destined to win that race. Many people incorrectly believe that Hitler had some ulterior motive to the war; that he desired power or conquest and simply used Nazism as a facade to control people. This, however, simply isn't true. Hitler so fervently believed in his worldview that he sabotaged his own war effort on the Eastern Front by using valuable resources not on fighting the Soviets, but on exterminating the Jews. Hell, it has often been suggested that if Hitler wasn't a genocidal maniac, he may have beaten the Soviets as the beleaguered Soviet population would've supported his war effort against the tyranny of Stalin. Instead, he ordered the extermination of entire villages, essentially forcing the Slavs to support the Soviet war effort or face assured annihilation.
Hitler had started to rebuild the NSDAP after his release from prison, taking advantage of the terrible economic situation brought on by the Great Depression. With the help of Goebbels and the Strasser brothers, he managed to gain a lot of political clout. In 1930, the Nazis won over a hundred parliamentary seats, a meteoric rise for a party that had been obscure just a few years earlier. Hitler began to rise through the ranks as well, gaining more and more positions until he decided to run for president against Hindenburg. He lost the election, but Hindenburg was urged to appoint him as chancellor. After all, the Nazis were a major party now and they needed to be placated, lest they repeat what happened in Rome. More importantly, Hindenburg and his coalition had improperly assumed they could control Hitler and the Nazis to suit their own ends.
The next year, 1933, the Reichstag was set on fire. A Dutch communist was blamed for the act. Modern historians agree that he did actually do it, but that he was probably aided by the Nazis and was not of sound mind to begin with. Hitler convinced Hindenburg to pass an emergency decree that suspended human rights, and the German Communist Party was soon dismantled. This decree was used by the Nazis to obtain a de facto voting majority in the parliament, which then voted to give Hitler even more power through the Enabling Act of 1933, essentially voting the Reichstag out of existence and allowing Hitler to pass his own laws without their involvement.
Hitler was now the dictator of Germany, but he still had to consolidate his rule. By the end of the year the NSDAP had voted itself to be the only legal party in Germany, making the nation a one-party dictatorship with Hitler at its head. The next year marked the death of Hindenburg, and Hitler's combining of the Presidency and the Chancellorship into one position of power, becoming the Führer. Hitler purged any "disloyal" elements remaining in the Night of the Long Knives. Special note goes to the Strasser brothers, who were the last major remaining socialist element within the party. Just a year after that, the infamous antisemitic Nuremberg Laws were passed, placing oppressive restrictions on the Jewish community and marking the beginning of worse things to come note .
As for Japan across the way, the concept of "fascism" did not technically exist, but Hirohito's regime was decidedly fascist in nature, being a one-man dictatorship. Even concepts of racial superiority were emphasized, particularly when talking about other Asians. However, Hirohito's regime was definitely more of a military bent, and was more styled like a traditional nationalist dictatorship. Still, many people today choose to call its government fascist. Alternatively it is also sometimes seen as a military junta, with the senior officers of the Imperial Japanese Army and Navy exerting considerable control with Hirohito winding up as a leader whose power was chiefly symbolic. Said senior officers were generally of a highly militaristic, quasi-fascist mindset, so this technical quibble doesn't detract from the overall fascistic nature of the country.
Also of note are the many fascist movements that cropped up around the world. In Britain, another disillusioned socialist named Oswald Mosley started the New Party, which merged with the British Union of Fascists with him at the head. In the USA, the Silver Legion of Fascists were formed by William Dudley Pelley after the Nazis took over Germany in 1933, but of more pressing concern was the German-American Bund, which was far more influential. In Romania, the Iron Guard fascists grew in size, and would eventually take over in 1940. In Hungary, Admiral Horthy ruled an autocratic -but not quite fascist- regime. France also had a fascist movement of sorts, and plenty of pseudo-fascist parties formed throughout Europe. Latin America also hosted some fascists as well, particularly in Brazil and Chile. In the Middle East, fascism was largely ignored, but the various monarchs and people collaborated with the Nazis prior to the war (mostly to sell them oil, especially in the case of Pahlavi-led Iran) and the Nazis, in turn, declared them to be "Aryan" peoples as well, albeit "lesser" Aryans. Some people criticized the Ataturk regime as being fascist, and while there were some similarities, Kemalism had more in common with socialism than fascism, and was strongly against fascism's socially regressive policies.
All in all, the fascists used the economic turmoil of the 1930s to grow their movements, but they only really succeeded in Germany and Italy. Still, ideas of race, Social Darwinism, and Antisemitism were not uncommon even among non-fascists. In fact, those ideas were alarmingly common, and had been used to justify the colonial atrocities of many nations during the previous century. In this way we can see that fascism did not evolve in a bubble, and certainly did not come from the blue. It was built on a long-standing beliefs of latent European superiority in race, and World War II made people confront those ugly beliefs at their most extreme.
Perhaps more important than the course of the war itself, in retrospect, was the participation of other countries and their peoples in it. Rallying to the Republican cause were the International Brigades—Frenchmen, Americans, Britons, you name it. Sent to aid the Republican cause was a force of volunteers from the Red Army, complete with tanks and aircraft. Sent to the Nationalists was the "Condor Legion" of volunteers from the Wehrmacht und Luftwaffe, again complete with airplanes and tanks, and an Italian contingent. Much more important than the soldiers were the materials both sides managed to scrounge and throw at each other. Broadly speaking, the Nationalists ended up with the major rural and agricultural areas and the Republicans with the urban and industrial districts.
However, although most companies were willing to sell arms and equipment to both sides, absolutely nobody was willing to loan the Republican government any money... except the Soviets, who demanded massive down-payments from the gold and silver held in reserve by the central banknote . Franco, on the other hand, was given absolutely massive loans—with 1% interest that was to be paid in crops and raw materials—which covered as much as 90% of his expenses by Nazi Germany. Moreover, the Republicans also found it much harder to buy things from parties other than the USSR's armaments bureau because business interests like the Shell and Standard Oil corporations effectively embargoed themnote and even gave discounts to the Nationalists. However, the Nationalists only needed to buy some 10% of their war-material, albeit all of their petroleum supplies, from Anglo-American companies. The other 90% was pretty much given to them by Germany, and some from Italy.
Many have read portents of things to come into the conflict, such as Mussolini's enthusiasm for participating at great expense despite Italy's economy being in a poor state—all the while continuing to believe that war was necessary to make Italy strong 'again', remaining oblivious to the fact that the Roman Empire's strength had come from more things than having Italy at the heart of it. Also of note is the way Britain and France lead the League of Nations into total inaction over the conflict despite the Republicans' appeals for them to intervene—save instituting an arms embargo across the peninsula, which Germany and Italy somewhat hilariously take leading roles in 'enforcing'.
By the Summer of 1939, Franco's Nationalists triumph, with Axis support playing the decisive role in their victory. The international volunteers are left to return home, the victors amid much fanfare, and many see the war as having been a proxy conflict fought between the emerging forces of European Fascism and everyone else—one that may well testify to the future of the latter. The French in particular are stung by the apparent proof that the citizen-militias of democracy were no match for the forces of fascism. Hitler sees his belief in the Allies' inherent apathy, decadence and cowardice vindicated. The Allies' worries about Generalissimo Franco and his New Spain are unfounded, however; unlike his dictatorial benefactors, he is a man with a realistic assessment of his country's economic and military strength—i.e., not much—and no real thirst for conquest or vengeance.
After half a century of Japanese expansionism, Chinese (urban) public opinion, on the other hand, would not stand for anything less than firm opposition to Japan. Many among the emergent middle classes opposed any further political compromises (with Japan), railing at both real and perceived insults to Chinese national pride. So when the Marco Polo Bridge incident turned into yet another border skirmish, the conflict quickly escalated to a scale that the leadership of neither side wanted. Generalissimo Jiang Jieshi (better known as Chiang Kai-shek to Anglophones) and his entourage would have much preferred to avoid a full-scale war so they could focus on eliminating the Communists, independent-minded warlords and bandits; the Imperial Cabinet had been happy trading with China and preparing for the seemingly-inevitable war against the Soviets.
As it was, Jiang's warlord "allies" in North China soon proved incapable of offering serious resistance to the Imperial Army. He quickly committed his loyal forces—less than a fifth of the forces in the area he controlled, which was less than half of inner China—to destroying the Japanese concession in Shanghai, opening up a new front there as part of his strategy for defending the lower Yangzi delta. This was the economic heartland of the Guomindang's territory, containing three quarters of their industry. This led to a curious spectacle wherein the Japanese government continued to insist that this latest "China Incident" was not a war, even as they committed half a million men, supported by tanks, airplanes and warships, to fight a highly visible battle which dragged on for three months. The street-to-street, house-to-house fighting at Shanghai is yet another of the many origin stories for what would later became known as the "Molotov Cocktail". Jiang's men resort to using them against armoured cars and tanks because they don't have enough anti-tank weapons, and the ones they do have usually aren't where they're needed. The Empire's usual spiel about pan-Asian cooperation (with them as the leaders, of course) rang rather hollow when the advancing Japanese army broke discipline for a spot of unpleasantness in the comparatively-lightly defended (now former-)National Capital at Nanjing. The few foreigners remaining in the city tell of events which newspapers in the West eye-catchingly call the "Rape of Nanking" or the "Nanjing Massacre".
With Jiang's best and, more importantly, most loyal forces in disarray, the situation becomes critical. Japanese forces strike westward from their concession in Shandong province, and the victorious lower Yangzi force pushes inexorably up the Yangzi with the support of Imperial Navy warships—the river is deep enough, and the Guomindang's artillery forces weak and ill-coordinated enough, to make sailing battleships (as well as supply- and troop-ships) up the Yangzi a valid tactic. At the same time, the Northern Expeditionary Force is moving southward and threatening to link up with them—together, they have a good chance of surrounding and eliminating most Guomindang and Guomindang-allied forces north of the mid-Yangzi. Jiang orders the dykes of the Yellow River blown to disrupt their logistics and prevent them from consolidating their hold on the occupied territories. The flooding buys his forces time to regroup and to arm and organise partisan groups, but at least a million die from the disastrous flooding and droughts that ensue.
In any case, the Imperial Army's supply chains are stretched to their limits, and their forces spread dangerously thin. Japan now controls all the most economically and strategically important regions of China... fighting a war of huge expense against the world's most populous nation for no good reason, with no end to the conflict in sight. Neither side could accept the terms the other was willing to offer—Jiang could not settle for anything less than a white peace with Japan, who couldn't accept anything less than an indemnity or reparations. Furthermore, the Soviets are looking more threatening than ever—the conflict has driven Jiang to sign a non-aggression pact with the USSR in exchange for a one-off gift of arms, ammunition, equipment and technical assistance—they're using neutral Mongolia to send him artillery, airplanes and advisers by the score. What follows is years of some of the messiest partisan fighting ever, on top of the standard fare of poorly-coordinated and -supplied open warfare which rages on and off between the IJA and Jiang's loyal Guomindang forces.
The reaction to the 'China Incident' abroad was one of apathy. Upon the death of President-for-Life Yuan Shikai in 1916, the Republic of China had disintegrated and undergone a long period of intermittent factional warfare between different warlord coalitions. The rise of the Guomindang had seen the bloodshed decrease, but even in 1937 it was considered a perfectly normal state of affairs for there to be fighting in China. Though news of the Imperial Army's atrocities had generated international disapproval and condemnation, few non-ethnic Chinese cared enough to pressure their governments to do anything about it. People related more to the events in Europe, particularly the Spanish Civil War—which was better-documented, featured Europeans, and seemed like it might be a testament to the future of (European) Civilisation.
From the Japanese seizure of the France-sized northern provinces of Manchuria in 1931 to the full-scale invasion and occupation of 1937, the whole mess served to highlight the true uselessness of the League of Nations. Its reaction to the very obvious problems at hand was effectively to sit in a corner with its eyes shut and its fingers in its ears saying "La la la I can't hear you!". When they had tried to reprimand Japan for its actions back in 1931, Japan simply left the League. This last straw, when taken with incidents like the Italian annexation of Ethiopia, only encouraged the 'Axis' (formed by the Tripartite Pact between Germany, Italy and Japan) powers to take action against what increasingly seemed like tired and weak old democracies that hadn't the stomach to fight. Hitler in particular was convinced that Britain and France were in no way interested in another war with Germany and would likely only fight to defend themselves. This misjudgement was just asking for trouble, as was the belief that having an Empire was an automatic guarantor of prosperity, never mind the enormous costs of fighting a war.
However, this was soon followed by claims on 'the Sudetenland'—territories just over the border of Czechoslovakia which held German majorities. This was a bit more difficult, as Czechoslovakia was overwhelmingly Czech and Slovak and they were unwilling to give up their border areas (which not-coincidentally held most of their fortifications and military bases). War was narrowly avoided with the signing of the Munich Agreement, a League of Nations initiative signed by Germany, Italy, France and Britain. (Czechoslovakia was notably absent from negotiations, and the Soviets were also excepted on the usual grounds that they were Dirty Communists.) Czechoslovakia was thereby made to give up the Sudetenland to Germany, a slice of territory to Hungary and a scrap to Poland. This done, Europe and her dependencies breathed a sigh of relief—war had been avoided. British Prime Minister Neville Chamberlain (in)famously announced, "I believe it is peace for our time." Hitler promised that this would be his last territorial demand.
He lied. Not only was this followed by a lighting-fast invasion which saw the Czechs integrated into Greater Germany as Bohemians and the Slovaks being given their own, 'independent' country, but Hitler then started making claims on Poland and the "corridor" separating the bulk of Germany from the province of East Prussia, and in particular the Free City of Danzig. Poland refused because they saw Hitler's demands as a threat to their independence, citing the Danzig seaport as important to trade and losing this trade meaning subordinating themselves to the Axis and reducing themselves to near-servitude as their entire trade would be dependent upon Germany. Finally alarmed at this state of affairs, Britain and France declared their support for Poland and stated that any threats to Poland's independence would mean war.
We all know what happened next.