The Great Depression Flashcards
Pre-depression USA
In the 1920s, the USA was the most prosperous country in the world.
1) High wages
2) Sent billions to Europe to help with WWI recovery
3) American companies performed well, so people abroad bought shares in them
What happened?
Overproduction of goods due to competition with foreign countries e.g. Japan led to a greater supply than demand. In 1929, the American stock market crashed which caused everyone to sell their chares at once. By October, prices had dropped significantly. Businesses had collapsed and millions of people faced bankruptcy.
Problems for the USA
In 1929, the USA stopped sending money abroad and asked for all loans to be paid back. By 1930, there had been several runs on the banks which caused them to collapse and by 1932, nearly 12 million people were unemployed. World trade and industries were also affected.
Who was least affected and why?
The USSR was least affected due to communism.
What happened to Germany?
It suffered greatly as a whole.
How did it make the League’s work more difficult?
It caused widespread poverty which caused people to seek out the political extreme and right wing leaders. Hitler was also elected in 1933. He wanted to defy the LoN and break the terms of the ToV. Countries e.g. Britain and France were so pre-occupied with dealing with their own struggles with economic prosperity and poverty that they did not have time to help the League continue to carry out its measures of arbitration.
What political conflict was an indirect impact of the depression?
The Manchurian crisis of 1931
