The period between 1916-1936 saw military buildup of major European powers and creation of blocs: Entente and Allied Powers that eventually led to the outbreak of the war between those factions (The Great War). Crash of the New York stock market led to worldwide depression and socialist revolution in USA. Japan begun to assert itself as one of the Great Powers, equal to the West.
German colonial policy
Rebellion in German East Africa
In 1916, Sukuma and Nyamwezi rose up against the Germans in German East Africa. Rebels fought in a guerrilla warfare and Germany, pitted against better adapted enemy that had support of the local populace had trouble to defeat. The uprising lasted well into 1917, with isolated guerrilla units fighting until 1920. In 1916, German intelligence reported readiness of Ovambo to rebel in German South-West Africa. Fearing another rebellion and seeing how colonies were not only unprofitable but actually a huge drain of resources and of, already strained by the military buildup, budget, Emperor Wilhelm made the decision to sell the colony to the British dominion, Union of South Africa.
Sale of German colonies
The decision to sell German colonies was very unpopular, especially among conservatives but widely was applauded by the growing Social Democratic Party and some liberal parties. The first colony to be sold was German South-West Africa, sold for 2 billion German Marks, a value considered very high by standards of that time. In the period, subsequent colonies in Africa and Kaiser-Wilhelmsland were sold to United Kingdom and her dominions and France. The biggest disappointment was lack of British interest in buying German East Africa, despite their attempts to form a railway from Egypt to South Africa, as result of the civil war couple of years earlier. Ultimately, it was sold to them for less than one billion Marks.
American economic policy
The peacefulness of the early 20th century led to liberalisation of American economy. This resulted in a rapid growth but also growing disparity between the workers and the owners. On so called Black Monday, 23 March 1925, panic on the stock market caused an unprecedented loss of value of DOW Jones. After sew months, the economy showed signs of limited rebound but crashed even more in 1926 and continued to spiral downwards with unemployment reaching 29% in 1927. The state attempted to spur more investment via tax breaks but bankers and investors refused to invest their money and the American budget collapsed, being forced to go heavily in debt and massively cut spending.
Strikes and Second American Revolution
While workers strikes were happening during the entire duration of the crisis, the biggest strike was Chicago General Strike of 1927. The strikers and the police begun fighting in the streets and the American government sent army to pacify the strikers, but the soldiers mutinied and joined the strikers. The socialist propaganda called the strikes "Second American Revolution" and the name stuck. The trade unions and parties overseeing the strikes merged into one - Socialist Party of America and seized control of Chicago on 31 March 1927.
Civil war in USA
Having significant workers support, SPA quickly took over Great Lakes region, New England and captured New York and Washington. Nationalist organisation in the Deep South attempted a rebellion but were crushed and purges by the socialists. American counteroffensive in 1928 failed after taking Chicago in a bloody battle and country plunged into chaos, with California, Washington, Oregon and Idaho declaring independence and joining together to form United Pacific States and the rebel Pacific Army.
United Kingdom grew increasingly worried by the revolution in USA and rapidly increased its army in Canada. Spread of the socialist ideology was the biggest and official reason for the invasion but the British had also hoped to capitalise on the chaos in its largest rival. In a secret German-British diplomatic note, Germany approved of British invasion of USA in exchange for British approval to German-Austrian war. Both the Germans and the British were also concerned about the growth of USA, which was now the strongest economically country in the world and could boast world's largest fleet and impressive army.
In September 1928, British troops in Canada crossed the border in New England and using the surprise element defeated the defenders. All parties in the civil war called for a truce to defeat the invader. In this way, the British intervention actually simplified the reunification process. The Pacific States, in a close vote in the parliament decided to side with the invading British troops, in exchange for recognition and promise of independence.
After the initial surprise has ended, Americans started to defend fiercely, much to British surprise and stopped the Commonwealth advance in New York in a huge battle. Simultaneously, the British Army captured Alaska and Hawaii. The Philippines declared independence, only to be attacked by the Japanese two years later. The British high command changed British battle plans and attacked from the seas (since large part of the navy had defected to the United Pacific States) and they captured Florida, New Orleans and other ports, effectively destroying remains of American fleet. The now distracted American army was unable to defend New York successfully again.
But as 1930 came and the casualties were mounting, the British were showing signs of fatigue, both in America and on the home front. Commonwealth troops lost New York and were threatened in Florida. UK and USA agreed for an armistice in March 1930 and peace was signed, giving independence to United Pacific States and transferring Alaska and northern Maine (border from before Webster Ashburton Treaty) to Canada and Hawaii becoming a British protectorate.
End of the civil war
As the north USA, seat of the socialists, had seen most of the fighting, the odds of the federal government winning the war were now vastly increased. To avoid further bloodshed, both sides agreed to peacefully end the conflict, with the government returning to power, but realising many of the points demanded by the SPA. The crisis soon ended but the USA never fully recovered from the damage it had suffered, with the immigration ceasing nearly entirely and the country never returning to its former great power position.
The lead-up to the Great War
In 1921, the negotiations between Germany and Austria-Hungary had broken down, as Emperor Wilhelm had no interest in renewing their alliance, since there had been a real possibility to ally with United Kingdom, which he prefered for both personal and geopolitical reasons. He was also convinced by the German nationalists that Austria-Hungary was an artificial being as opposed to the German nation-state and had no right to exist. To make up for the lost ally, Germany signed an alliance with Italy 1922. The relations between Germany and Austria-Hungary continued to sour and in 1929, Germany provoked a war. Austro-Hungarian troops were obliterated by the superior German Army. The German high command held troops on the border with France in case of French aggression, which never came, as result of turmoil surrounding the elections there.
Partition of the Austro-Hungarian Empire
The Germans had agreed to give up Julian March, Istria and Dalmatia to its Italian ally. The territory inhabited by the German-Austrians was annexed directly into Germany, in a move supported by majority of Austrians This large increase of territory was condemned by the French and Russians and they signed a defensive pact together to protect against Germany. The remaining territory was to be split between puppet nation-states, ruled by German aristocrats. A Polish rebellion in West Galicia and independence demonstrations in other countries. Ultimately, in 1930 the Germans had given up on enforcing their rule over newly formed countries and let the citizens choose their leaders. Most of the countries became republics, bound only by an alliance and a cooperation treaty with Germany.