The French were stressed.
1 million (10 lakh) French soldiers had died. A massive blow to its population.
They had just come out of war in 1918 – World War 1.
Scarred from this, the French government began discussions about what they could do to guard themselves in the future.
Three main solutions came forward.
In World War 1, a French fort had put up a strong fight despite having few soldiers in it. The fort had thick walls and was able to withstand heavy firing.
This inspired many. It could hold the answers they were looking for.
Forts allowed a small number of soldiers to fight larger armies.
Of the three solutions that came forward, two solutions proposed that France needed to build a wall of forts.
The third solution suggested that the future of war would have airplanes and vehicles like trucks and tanks. Remember, planes and other vehicles were still new inventions in this era.
This third solution was dismissed.
Slowly, the decision-makers agreed – they needed a wall of forts at the border with Germany.
History of Attacks
There is some background to this story that we need to understand.
For many centuries, France has been attacked via its border with Germany – it is easy to cross this stretch of land. It has less obstructions.
Even in World War 1, this was the route from where the Germans attacked.
Beside this is the Ardennes forest.
This forest is incredibly dense and thick. It was believed to be practically impossible to cross.
And then the other route is via Belgium.
After World War 1, the French decided to secure their border with Germany using a wall of forts and other structures.
This came to be known as the Maginot Line.
Planning
The Maginot Line was not a wall. It was a wide area that was about 10 km wide from front to back of the line.
The front portion had smaller fortifications. The rear had bigger fortifications.
The fortifications were capable of firing and attacking enemies that would come to cross them.
Many of these fortifications were 1 km apart or more.
The Maginot was not a wall, but it was a network of buildings.
If you are thinking of a medieval fortress, you are wrong.
The fortifications were mostly underground. Only a small portion would be outside.
They were well-equipped with generators, air conditioning, food storage, and other daily needs. Many of them could house soldiers for months.
From the outside, many looked like metal domes. That’s it.
These iron domes could rise up and allow guns and artillery to be fired.
The buildings were connected via telephone lines and even had a railway network.
It was an example of fantastic planning and engineering.
Construction
The Maginot Line got a healthy amount of funding only in 1930.
In a few years, the line of fortifications, trenches, and other such barriers came up.
Slowly, the Maginot Line was built all the way from the Italian border side and then along the German border.
When the Maginot Line reached the Ardessen forest, construction was given low priority.
The French expected less threat from this side. Ardessen forest was dense and thick. Here, the fortification was less.
Only the Belgian border side was left.
Belgium was an ally of the French.
So if the Germans wanted to attack France via Germany, they would have to cross Belgium. If necessary, the French soldiers could enter Belgium and fight the German army at the Belgium-Germany border.
This was the plan based on the past patterns.
France had a smaller number of army men.
And the Maginot Line’s fortification meant fewer men would be required to fight the Germans.
World War 2
In 1937, Belgium declared that it was neutral. It was not going to side with France.
Two years later, in 1939, Germany attacked Poland. This marked the start of World War 2.
France remained alert to a possible attack by Germany.
In 1940, Germany attacked France.
This was a day France had feared for decades.
But – it was also a day France had prepared for, for decades.
The fortifications lined the France-Germany border. French soldiers were ready inside them. Soldiers were ready on the Belgium side too.
Germany attacked in three parts.
One party moved towards the France-Germany border – towards the Maginot Line.
Another party moved towards France crossing Belgium.
Both these sides – France had prepared.
But the third party of Germany – they attacked first.
And where did the third party attack from?
They crossed the Ardessen forest and attacked.
The thick forest that the French thought nobody could cross – the Germans crossed it.
They used modern vehicles like tanks and trucks and were able to clear tracks in the forest.
An attack from the side of the Ardessen forest – this had never happened before. The French did not prepare for it.
The French lost many men and were on the back foot.
As you might know, World War 2 was fought by many countries and took many years to get over.
A lot happened before, during, and after the Maginot Line was made. We will not be going into those details here.
Why the cycle did not repeat
Maginto Line was built using 7 billion francs – a monumental amount of money.
It was built so that the Germans would not attack from that side.
The Maginot Line succeeded in that.
However, it failed to prevent the Germans from attacking France.
Patterns and cycles have a unique characteristic.
They repeat.
But as we saw, sometimes patterns don’t repeat.
The past teaches us a lot about the future. But like any teacher, they are not always right.
Relying blindingly on past patterns and cycles can prove to be a mistake.
That is even more true in a world where change has become so common.
Quick Takes
+Former PMs PV Narasimha Rao and Chaudhary Charan Singh, and agricultural scientist Dr MS Swaminathan will be awarded Bharat Ratna 2024.
+RBI has kept the interest rates unchanged at 6.5%, with an inflation projection of 5.4% for FY24 and real GDP growth at 7% for FY25.
+India’s forex reserves stood at $622.5 billion on 2nd Feb up from $616.73 billion in the previous week.
+India’s fuel consumption rose 8.2% year-on-year in Jan with a total of 20.04 million tonnes vs 18.51 million tonnes last year: Petroleum Planning and Analysis Cell.
+Disney Star’s sports segment recorded an operating loss of $315 million as of Dec 2023, up 144% year-on-year.
+Iran has removed visa requirements for Indian citizens. Individuals with passports can enter Iran without a visa.
+Foxconn has issued invitations for bids to construct a chip assembly and testing factory in India. To be built in collaboration with the HCL Group.
+The Indian government has collected around Rs 600 cr in penalties for not linking Aadhaar with PAN. About 11.48 cr PANs are still not linked with biometric identity.
+India’s crude oil import from Russia fell to its lowest in 12 months in Jan 2024. Russia supplied 1.2 mn barrels per day in Jan vs 1.32 mn in Dec.
+India’s coal production rose 10.3% to 99.73 million tonnes in Jan 2024 vs 90.42 million tonnes in Jan 2023.
6-Day-Course
Theme of the week: important ratios in choosing stocks
We’ve reached the end of this week’s course that started on Monday.
Here’s a test you should take. Get pen and paper!
Question 1:
PE ratio may help us understand if a stock has too much debt.
-True
-False
Question 2:
A stock’s price is Rs 500. The dividend it has declared is Rs 20. Dividend yield is:
-2%
-4%
-20%
-Rs 20
Question 3:
Company A has a working capital ratio of 4.
Company B has a working capital ratio of 0.75.
Which company is healthier?
-Company A
-Company B
Question 4:
Let's say a company's total liabilities are Rs 3,000 cr, and its shareholders' equity is Rs 6,000 cr. Its debt-to-equity ratio is:
-0
-0.5
-2
-3
Question 5:
ROE ratio helps investors assess how effectively a company generates profit when compared to the shareholders' equity.
-True
-False
Answers:
Q1: False
Q2: 4%
Q3: Company A
Q4: 0.5
Q5: True
The information contained in this Groww Digest is purely for knowledge. This Groww Digest does not contain any recommendations or advice.
Team Groww Digest