The Great Depression

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

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• 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

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“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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