What action did the U.S. take regarding World War I debts in the 1920s?

In the 1920s, the United States took significant action regarding debts incurred during World War I, specifically by forgiving debts for several countries. This action was largely influenced by the economic realities of the post-war period, where many European nations were struggling to recover from the devastation of the war. The U.S. faced mounting pressure from these nations, which found it increasingly difficult to repay loans.

Forgiving debts was not just an act of generosity; it was also a strategic move. It aimed to promote economic stability in Europe, which in turn would benefit the U.S. economically by fostering trade relationships and preventing further economic collapse in the region. This decision aligned with broader American interests in promoting a stable international financial system, allowing for the eventual rebuilding of European economies that could engage in trade with the U.S.

The other actions listed do not accurately represent the main focus of U.S. policy concerning war debts. Building alliances with Europe was a more complex matter, often involving diplomatic efforts rather than just straightforward debt forgiveness. Increasing tariffs, on the other hand, typically aimed at protecting U.S. industries and would conflict with the need for international economic cooperation post-war. Similarly, expanding military presence was not a primary strategy related to the obligations of war