The First World War had huge consequences for the Kragujevac factory. Occupiers seized large stocks of raw materials and machinery, and most buildings were demolished. At the peace conference at Versailles in 1919, the delegation of the Kingdom of Serbs, Croatians and Slovenians (SHS) presented the information about the damage on the military industry. VTZ was damaged by 70% of prewar value. Commissions that went to countries that took spoils of war were established. The largest number of machines and products remained in the occupying countries, and a very small number was returned, under pressure.
The workers did not have a place to return to after the war, so a number of them was transferred to Belgrade, some of them to Sarajevo, a small number remained in Kragujevac to work on clearing up. They immediately started to remodel large quantities of trophy weapons. Different models of rifles, sub-machine guns and machine guns of French, Austrian, German and Russian production were remodeled (panels 36, 37).
Since 1922, returned machines were re-installed, as well as the ones that were purchased and the ones obtained as war reparation.
The restoration began. Again, there were factory tasks: first to make and repair all weapons, ammunition, stores, carts, horse team equipment for the army, border guards and gendarmerie; to examine the validity of imported weapons and ammunition; to study and improve the production of weapons.
Contract to purchase a license for the production of Mauser M 24 rifle, cal. 7, 9 mm from the Belgian arms factory near Liege, Herstal, was signed in 1924. Belgian experts agreed to work on projects for new plants for rifles and infantry ammunition. Trial version of the first M 24 rifle was made in March 1928, and the official opening of Gunsmith Shop and infantry ammunition factory, as well as the start of fabrication of M24 began on October 15, 1928, celebrating the 75th anniversary of the factory (cabinets 15, 16, 17). The ceremony was attended by top representatives of state and military authorities, and the speech was given by the then director of the Institute, divisional general Zivojin Terzibasic (showcase 15). On this anniversary, a large number of workers and the management were honored. By the end of the 1929, the permanent staff of the Serbian army was armed with M24 rifles. The opening of the factory strengthened the defensive power of the country very much.
From war reparations, Administration Building was erected in 1928, the Apartment of the Works’ manager, VZS Boarding School in 1929, and in 1933 the Works got a telephone exchange (showcase 15).
Among the other new-built workshops, there were tool room, carpentry room, blacksmith shop, a workshop for the repair of motor vehicles – the garage where 500 American brand Chevrolet trucks were assembled by World War II.
Between the two wars, the factory did not do much work on unification of calibers of existing types of weapons. There were more than 130 models of guns, more than 10 models of rifles, and 8 models of machine guns and light machine guns. There were more than 300 types of ammunition. Beside VTZ, five works were developed: in Krusevac (Obilicevo), Cacak, Sarajevo, Belgrade and Kamnik (panel 49), and private military factories were built.
Department of Pyrotechnics worked on the elaboration of ammunition, production of land mines and fuses (panel 43). VTZ made Stokes Brandt mortars 81 mm (panel 41), offensive and defensive hand grenades, bombs, land mines, pistols, riding, cargo and horse team accessories (showcase 18, panel 39). Howitzers were remodeled; cannons, machine guns and vehicles were repaired.
VTZ could not offer the full range of products for defense of the country, and some were still imported. There was a lack of necessary production facilities and machinery. Investments were sufficient to satisfy will and basic requirements of the Serbian army in peacetime. Two significant achievements were commissioning of the mill and re-purchase of license from Czechoslovakian company Zbrojovka from Brno for the production of M37 machine gun (panel 42). Machines were purchased and the production of this light machine gun was mastered.