ABSTRACT
This chapter analyses the disruptive effects of the First World War on the flow of international finance with particular reference to Hungary in the 1920s and 1930s.1 At the end of the First World War, the succession states of the Austro-Hungarian Empire were confronted with the dismantlement of internal markets and communication networks. Furthermore, in many cases, the post-war boundary settlements exacerbated rather than resolved tensions over national minority populations. The conditions imposed on Hungary at the Treaty of Trianon, in 1920, seemed particularly harsh: in comparison to the pre-war kingdom, the new state lost nearly three-quarters of its territory and the majority of its population. In spite of attempts at stabilisation and reconstruction, Hungary remained economically weak. The enduring legacy of the Great War in central Europe was one of irredentism, economic weakness, and national humiliation. In the wake of the Great Depression and Financial Crisis, an existing tradition of authoritarianism in Hungary provided a platform for the rise of a form of nationalist dictatorship.
