World Depression


  • The Wall Street Crash of 1929

  • What happened

    • It led to widespread unemployment
    • US-based banks recalled and did not extend loans that had been given around the world
      • The USA had the largest economy at that time
      • This had a significant impact on many nations, especially Germany
  • How nations reacted

    • “Trade Barriers”
      • High taxes on trade with other nations, low taxes within the empire
        • Germany and Japan relied heavily on US trade, so they were greatly affected by the US trade barrier
    • “Imperial Preference”
      • Trade within colonies
      • The US and USSR had resources internally, so they did not need to have colonies or trade with them
      • British trade barriers affected East European nations
        • No trade with Britain meant a weaker relationship with Britain
        • This led to closer relationships with Germany (or the Soviet Union)
    • Deficit Spending (US)
      • Roosevelt implemented it, while the Democrats opposed it


  • Political Effects
    • Governments became unstable, leading to coalitions
    • US
      • Roosevelt @Democrats - A man of action and inspiring speeches
      • Took immediate actions against the Great Depression after becoming president
      • Continued to support the US public view that foreign wars were not the concern of the US
        • To avoid wasting money on military spending
    • UK
      • Became a “National Government” - a coalition of most major parties
      • The Labour Party: opposed increasing military spending
        • Believed it would cause war or because of the Great Depression, there were not enough funds
    • France
      • Did better than other nations, with a lower unemployment rate
        • Strict imperial preference
        • Many people were employed in agriculture
      • However, the government was unstable and had many coalitions
        • 11 governments in 4 years
    • Germany
      • Led by Chancellor Bruning until Hitler’s victory
      • Implemented failed policies against the Great Depression
      • The situation was so bad that Britain and France suspended reparations
        • At the “Lausanne Conference” in 1932


“Coalition” of parties

  • Communism and National Socialism
    • Radical ideologies became popular during the depression
      • There was a relationship between the number of Nazi votes and the unemployment rate
    • They became popular because:
      • People believed that capitalism was clearly a broken system due to the disaster of the Great Depression
      • Industrialists and landowners naturally opposed communism and supported national socialism
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