Economic Growth
London, Great Britain
Slow recovery continued through quarter three and quarter four of nineteen thirty-seven, although heightened political turmoil in some corners of the world meant the growth was even slower than expected for quite a few countries.
Events in the Americas
Reports of Foreign Influence in the USSA
Chicago, United Socialist States of America
In October 1937, a group of officers and investigators presented a report before members of the United Socialist States of America’s legislature, based on the confessions of various counterrevolutionary leaders and their own investigation, warning that there had been significant foreign-based corruption in the military If the report is right, then it was appears that the amount of foreign corruption in the USSA, particularly its military, was significantly underestimated by the Yankee government.
Mexican Civil War
Mexico City, Mexico
Fighting in Mexico heated up during the late summer of 1937. The socialists were heavily supported by the USSA, and had great popular support from the Mexican people. While the other side was supported by British and Confederate troops, plus monetary aid from a number of other nations, it was clear that few Mexicans actually trusted the foreigners, and August and September saw another wave of defections from the Imperial side to the Socialists. In addition, reports circulated that men in Imperial uniform were actually shooting at Confederate and British positions.
The foreigners mostly dug in north and west of Mexico City, expected a full-on socialist attack. Instead, a stalemate developed in central Mexico, with heavy guerilla warfare. Socialist and socialist-allied guerillas played havoc with the Imperial forces, but the Imperials were successfully able to make and hold a shaky line from Morelia to Santiago de Queretaro to Xalapa. The main offensive occurred along the western coast, with the Socialists – and Yankee tanks flying Mexican colors – easily defeating the far less numerous Imperials. Guadalajara fell to the socialists in early October after a two week long siege. The socialists kept marching south towards Acapulco, which fell in December. A similar offensive occurred along the eastern coast, albeit less successful, and after a slow march was only able to capture Tampico by November.
Fighting in the city of Acapulco
While all this was going on, an intense air war was developing in the skies above Mexico. The Dixies and British were attempting to enforce air superiority, but the socialists had been given a large number of advanced Yankee planes, in numbers far more than the Imperials and their allies had bargained for. Due to this, they were time and time again unable to achieve the air superiority they had been hoping to gain, despite several pushes from the Dixies and British around September. Yankee and Mexican socialist bombers were able to strike repeatedly at Mexico City and the surrounding area.
In the south, a small contingent of Colombian troops allied with the Mexican socialists landed in Chiapas and Oaxaca in August. The Mexican Empire had few resources placed there, and thanks to Colombian troops trained in jungle warfare, plus unexpected support from the indigenous peoples of the area, most of Chiapas was under Colombian/Socialist control by the end of the year, and the socialists had moved into the outskirts of Oaxaca, and in the west had linked up with the socialists advancing down the west coast leaving the socialists in control of Mexico’s entire Pacific coast.
(Socialist Mexico: -5 Infantry III Brigades, -2 Militia Brigades, -3 Mounted Brigades, -3 Artillery II Brigades, -1 Destroyer)
(Colombia: -2 Mounted Brigades)
(USSA: -6 Infantry III Brigades, -3 Fighter I Wings, -6 Fighter II Wings, -1 Bomber I Wing)
(Mexican Empire: -7 Infantry III Brigades, -15 Militia Brigades, -3 Mounted Brigades, -5 Artillery II Brigades)
(Canada: -2 Infantry IV Brigades)
(CSA: -1 Medium I Tank Brigade, -1 Light Tank Brigade, -4 Infantry III Brigades, -2 Infantry IV Brigades, -3 Artillery II Brigades, -2 Fighter I Wings, -4 Fighter II Wings, -2 Interceptor I Wings, -4 Interceptor II Wings)
(Great Britain: -3 Infantry III Brigades, -3 Artillery II Brigades, -8 Fighter II Wings, -1 Fighter-Bomber Wing)
Yucateco Independence Recognized
Merida, Yucatan
The government of the Empress of Mexico and representatives from the Yucatan Republic sat down to negotiate a peaceful exit of Yucatan from Mexico. The deal was made that Yucatan would pay a hefty compensation to the Mexican Empire over several years, in exchange for Mexican recognition of the Republic’s freedom from Mexico City. The Yucateco people have applauded this, and are now celebrating their newfound independence, in much the same way as the people of New England did not too long ago.
(Yucatan: -5% Dissent)
Haitian Communist Leadership Killed
Port-au-Prince, Haiti
The Haitian anti-communist movement received its greatest victory yet when in August 1937, news arrived from an informant that several key figures of the Haitian communist leadership were meeting in a town in northern Haiti. Elements of the Haitian army who were on the hunt for suspected communist insurgents were immediately readied and sent to attempt to capture them, their numbers bolstered by bounty hunters and other paramilitaries. However, the government forces quickly fell into fighting with communist-allied militiamen who were guarding the town. In the battle that ensued and the crossfire every last communist leader who was meeting there was killed, plus dozens of civilians. With this, the Haitian communists have been utterly smashed, and now that they have splintered, the Haitian government believes that they no longer pose a significant threat to Haitian stability.
(-1 Infantry II Brigade; -5% Dissent)
War in Ecuador
Quito, Ecuador
The country of Ecuador was stunned when Brazil, aided by Peru-Bolivia, launched a daring invasion of the country. Called “Operation Andean Storm,” the invasion began in September when Brazilian troops stationed in northern Peru-Bolivia crossed the border of Ecuador. Catching the Ecuadorians by surprise, they were able to make significant advances up the western coast of the country before being stalled near Guayaquil in November. In the east, Brazilian troops trained in jungle warfare were able to capture the lightly defended entire eastern half of Ecuador, and have made to the Andes Mountains. Brazilian air superiority and artillery dislodged the Ecuadorians from Guayaquil, and they have advanced up the center of the country towards Quito, where the Ecuadorians have holed up in hopes of making a last-ditch defense.
(Brazil: -5 Infantry II Brigades, -4 Infantry III Brigades, -2 Artillery II Brigades)
(Ecuador: -12 Infantry III Brigades, -5 Infantry IV Brigades, -3 Artillery II Brigades, -2 Fighter I Wings)
Argentine Elections
Buenos Aires, Argentina
Presidential elections were held in Argentina in late 1937; the Liberal Party went into the elections with a public image of having helped stymie the worst effects of the Great Depression and having helped make gains in living standards; however, many Argentines were disillusioned by incumbent Elpido Gonzalez administration’s close affiliations with the Brazilians. Nevertheless, the Liberals were still quite popular. They nominated Marcelo de Alvear as the next president, and no other candidate was able to approach him in strength, allowing Alvear to win the presidency by a fairly large margin.
(-2% Dissent)
Events in Europe
Antonio Salazar Assassinated!
Lisbon, Portugal
By July 1937, it appeared that the end of the civil war had solidified Antonio Salazar’s hold on the Portuguese state and government, and that the process of rebuilding Portugal into a New State was well under way. Salazar had expressed open admiration for the path that Getulio Vargas was taking Brazil down. However, in September 1937, before these things could be accomplished, Salazar was stabbed in the back by one of his own bodyguards, who in fact was a closeted anarchist. The power vacuum was filled by Domingos Oliveira. Unlike Salazar, Oliveira does not have significant support amongst the military, and a few reports have surfaced that Oliveira’s grip is slipping. Although the socialists and communists of Portugal have been heavily decimated in number, they are still there, and there are those moderates who wish to create a republic.
(+8% Dissent; +5% Dissent in all colonies)
Spanish Elections
Madrid, Spain
With the death of Jose Sanjurjo and the establishment of a new Spanish republic earlier in the year, Spain held its first elections in over six years in 1937. Several parties contested in the elections, the largest of which were the centrist Partido Popular Español, the right-wing Falange Española Tradicionalista, and the broadly left-wing Partido Socialista Obrero Español. However, the interim government announced that any party affiliated with Communism would be barred from participating. Many of those people who would have voted Communist instead placed their votes for the Partido Socialista Obrero Español, giving it victory by a narrow margin. Interim Prime Minister Alejandro Lerroux handed over the reins of his office to Indalecio Prieto. Although there were a number of accusations of voter fraud from all parties, the election has given the Spanish people a degree of faith in the new republic.
(-4% Dissent; -2% Dissent in all colonies)
Public Works Development in Spain
Barcelona, Spain
In the initial months of the new Spanish government’s administration, a bill was passed effortlessly through that country’s legislature creating a nationwide public works program. The program would help give jobs to the country’s numerous homeless and unemployed in helping to make significant improvements to Spain’s infrastructure. Already, the economy is showing positive growth from the program, both from the new infrastructure and from the lowering of the unemployment rate. As many of the homeless and unemployed were supporting the country’s extremist parties, particularly the Communists, placing them at work has stymied Communist activity in Spain, or so many politicians claim.
(-2% Dissent)
Irish Elections
Dublin, Ireland
The people of Ireland went to the polls in late 1937 to determine who would run their country. The Conservatives, and Prime Minister W.T. Cosgrave, went in having to face the burden of unsuccessful economic policies and a declining standard of living in the country. The elections brought the social democratic Labor Party to power, spearheaded by William Norton. Norton has also been an outspoken opponent of the New Order Party in Britain, and used New Order extensively in his electoral rhetoric. This election could go down in history as one that complicates British-Irish relations for good.
(+3% Dissent)
France Annexes Belgium
Brussels, France
Belgium assumed that its future was secured with the signing of the Treaty of Calais. This could not have been further than the truth. In August 1937, a coup was attempted by Belgian national socialists and other French-allied groups. The capital erupted into violence. In the midst of the chaos, somebody in Belgium – his identity and affiliation are still uncertain – sent a telegram to the Paris, inviting France to come in and help restore order. France sent a significant chunk of its army in. However, the commander of the French forces, Alphonse Juin, marched into Brussels and declared that the French National Socialist Party was now in control of the country.
Belgium was rapidly annexed as a province of France. Sporadic fighting between Belgian remnants and French troops lasted through most of the rest of the year, although the results were woefully lopsided not only due to the larger size of the French forces, but also due to the better training and equipment of the French. The Belgian navy was captured in port, although loyalist Belgian naval personnel managed to scuttle its flagship and a number of the other ships before the French managed to secure the port. A task force was also deployed to bring Belgium’s African possessions under French control (see the Africa/Middle East section).
King Leopold and the existing Belgian government of Paul Van Zeeland, along with a number of other politicians, somehow managed to escape into exile in Germany, where they have pledged to do all they can to “restore Belgium’s rightful freedom from the French jackboot.” Panic has spread to neighboring countries, especially the Netherlands, as they fear that their corner of Europe might erupt into war.
(Belgium: -15 Infantry III Brigades, -2 Artillery II Brigades, -2 Destroyers, -1 Light Cruiser; –Existence)
(France: -8 Infantry IV Brigades, -1 Motorized II Brigade, -2 Artillery II Brigades, -1 Light Tank I Brigade, +7 Destroyers; +7% Dissent)
(Germany: +2% Dissent)
(Netherlands: +5% Dissent)
New Government in Germany
Berlin, Germany
The ruling center-right party in Germany has formed a broad ruling coalition with other center-left, center, and center-right parties in the country, which they are calling the “Weimer Vertrag.” The coalition has been created in an effort to defend Germany’s democratic process from its enemies – namely, France and Germany’s own extremist parties. Surprisngly little opposition was heard, and the process of forming the coalition was certainly expedited by the events in Belgium, which have spread a great degree of concern amongst the German populace that France is gearing up for war.
(-3% Dissent)
Scandinavians Call For Exit from League of Democratic Nations
Copenhagen, Scandinavia
Although Scandinavia has since the late 19th century had friendly relations with Great Britain, and the initial decision to form the LDN was popular, that support has cooled in recent years. The various Scandinavian leftist parties, which have been growing in strength, have come out in firm opposition to Scandinavian involvement in the alliance; and even a few of the ruling Social Democrats have been less than pleased, especially due to British politics’ sharp turn to the right in recent years. Others from all across the political spectrum oppose the LDN on the grounds that it does not benefit Scandinavia in any foreseeable manner. Although the Prime Minister officially still supports the LDN, opposition to Scandinavian membership in the alliance is mounting.
(+3% Dissent)
Comprehensive Program for Economic Development Begins in Finland
Helsinki, Finland
The country of Finland, even after its transition to Communism, remains one of the most unindustrialized parts of Europe. To help remedy this, Finland has embarked on a large-scale, all-encompassing program, heavily influenced by and modeled after the Soviet Union’s five-year plans. Large expansion in the country’s industry is being accompanied by agricultural reform, giving the country’s farmers more autonomy in regards to decision-making and making farming more productive using better seeds and equipment, and widespread infrastructure development via railroad construction and expansion. Finland is also establishing standards for product quality, such that quality will no longer be compromised in order to meet production quotas, environmental sustainability, in order to protect the country’s fish, forests, and farms from harm. Fixed consumer goods allocation is being phased out in favor of a system utilizing paper currency, which the government hopes will reduce the size of the country’s black market. Already, all signs are showing that the program will be a success, with the third and fourth quarters of 1937 showing much greater economic growth than previously. Accompanying the economic program is a comprehensive military reform, and some political reforms; an easing of prosecution of political enemies, and the impressment of some creative minds and highly qualified specialists into service for the state and/or military.
Sudetenland Plebiscite
Prague, Bohemia-Moravia
The long-awaited plebiscite in the Sudetenland occurred this year. There was grave concern beforehand that the pro-Austrian Sudeten German Party or the government of Bohemia-Moravia was planning something; however, this never happened. The plebiscite arrived, and was mostly peaceful, despite wrangling on all sides. The northern Sudetenland went to Germany by a comfortable margin, and the southern Sudetenland went to Austria by an even more comfortable margin. In the western Sudetenland, the results were too close to call, and after a heated recount, it turned out that Austria had won the region by less than a percentage point. Some pro-German groups have challenged the results, claiming that Austria or the Sudeten German Party had influenced the recount. Concern has also been given to the new Austrian border in the area, which the Serbian Office of Border Prettification has pejoratively called “the Sickle.”
(Bohemia-Moravia: -10% Dissent)
Poles Return Home
Warsaw, Poland
An agreement between the German and Polish governments provided any and all Poles living in Germany an opportunity for passage to Poland. Many Poles, especially working-class Poles, have taken up the offer and have left their homes in Silesia and Prussia for Poland, who have been given residences by a generous Polish government around Warsaw and Krakow and well-paying industrial jobs. This has had the added effect of ridding Germany of many Polish dissidents. Nevertheless, many Poles, especially Polish Socialists and Communists, have stayed behind, having been reluctant to leave their homes and unwilling to go to a country ruled by what they see as a repressive right-wing government.
In a separate part of the deal, the Polish government has been granted access to the German-controlled ports of Elbing/Elblag and Danzing/Gdansk for Polish trade.
(Germany: -3% Dissent)
Hungary Launches Resource Development Program
Budapest, Hungary
The Hungarian government has begun investing heavily in developing that nation’s natural resource sector, particularly when it comes to fossil fuels – namely, coal and natural gas. The government has begun constructing a number of coal mines and natural gas drills throughout the country, plus industrial infrastructure to process them and start an export-oriented industry. This has caused significant growth in that particular sector, but this has not spread across the entire Hungarian economy.
Peaceful Transition of Power in Romania
Bucharest, Romania
Romania stood at a precarious position in July 1937; a violent revolution or civil war seemed imminent. However, with the support of the Soviet Union, a power-sharing deal was negotiated, wherein the local Communist Party was elevated to government in exchange for promises to retain the monarchy and the existing Romanian constitution. The agreement seemed to satisfy both parties, and the Red Guards began to stand down, averting civil war. The social democratic Prime Minister Petrescu has been replaced by Communist Party General Secretary Stefan Foris. Newly implemented Communist economic policy, combined with an abundance of economic aid from the Soviet Union, allowed a reversal of Romania’s economic backslide and even created limited growth in the third and fourth quarters of 1937.
Although so far the Communists appear to be keeping to their promises, there remains great fear in Romania that with support coming from the Soviet Union, there is very little stopping the Communists from disregarding their agreement and turning the country into a full-fledged Communist state. This has not been helped by a continued wave of factory takeovers by workers emboldened by the Communists’ now being in government. Some of the fear and panic has spilled over the border into neighboring Bulgaria, as the Communist Party in that country has exploded in support.
(Romania: -2 Infantry III Brigades, -5% Dissent; Bulgaria: +4% Dissent)
Rumelian Plebiscite
Plovdiv, Bulgaria
The second plebiscite to occur this year was in the Bulgarian-majority areas making up the Ottoman province of Eastern Rumelia. Unsurprisingly, the area went to Bulgaria; however, the margin of victory was far less than anticipated, thanks to heavy Turkish investment in the region in the months just before the plebiscite occurred. The plebiscite has reduced Ottoman Empire’s holdings in the Balkans to Thrace and parts of Macedonia, area which Greece was claiming prior to the War of the Balkan League and the ensuing Greek defeat and revolution.
Greek Internal Developments
Athens, Greece
The transition of Greece into a Communist state began in earnest, with Nikos Zachariadis now firmly in control of the country and viewed as a hero of the people, an image spread by the Greek government-controlled media. Zachariadis’s ideological tract, which he calls “The Little Red Book,” has been distributed to all Greek citizens, and to other communist organizations around the globe. In the book, Zachariadis outlines his ideology; called by some as “Christian Communism,” it combines traditional Marxism with some of the teachings of Jesus Christ, encouraging Greeks to live as in early Christian communities, without private property. Indeed, Zachariadis’s government has worked closely with Communist-friendly Orthodox priests, although the majority of Orthodox priests still oppose the Communists.
Additionally, Greece has begun its own five-year plan, intended to drastically expand its industrial capacity within the specified time frame, although little industrial expansion has happened thus far. Rather, most economic transition in the third and fourth quarters of 1937 has been in the form agricultural collectivization, although not to as much of a degree seen in some other Communist states; the farmers still retain a great degree of autonomy.
(-3% Dissent)
Right-Wing Guerilla Activity in Greece
Ioannia, Greece
Continued conflict occurred in Greece between right-wing militias and Greek Communist military forces, especially in the areas near the border with Italian Albania. The militia are waging a guerilla war against the Communist government, and despite Greek efforts to put them down they are getting significant funding from unknown foreign sources. Several high-profile attacks were conducted against the military and other communist installations throughout 1937, but they began to heat up in particular in the Epirus region starting in September.
(-3 Infantry III Brigades, -2 Artillery II Brigades)