Great Depression

After WW1 the US starts well in the Roaring 20s where new commodities such as the radio are now available due to increased paychecks. There is a lot of optimism, even though the economy was not doing that well. In September 1929 the buying shares of New York stock exchange in Wall Street slowed down.

This is then broken in the 1929 the Wall street crash on Black Thursday (24th October). This also echoes across the Atlantic Ocean to the European continent still suffering the after effects war. European countries had borrowed from the USA in loans that they now could not repay and America could not continue to support leading to hyperinflation and global trade dramatically decreased. Led to extreme views being more prominent. Leading to economic protectionism and self isolationism allowing for authoritarian states such as Hitler to grow unchecked.

Causes of the depression:

  1. Wall Street Crash:

  2. Income inequality: meaning not enough buying power, creating domestic over production

  3. Domestic over production: creating vicious cycle as too many goods meant men were laid, off in turn meaning less demand,

  4. Exports Began to fall away: Foreign countries did not buy US goods as US had tariffs on European goods

  5. Speculation: Began to worsen with the rush of speculation in 1926 to get quick profits and dividends

How did it affect people:

  1. Ruined millions of investors

  2. Banks went out of business, 10,000 banks shut down

  3. Workers were laid off and factories closed 25% unemployment

  4. Many other countries were in turn affected especially Germany

Who was to blame

It was fashionable to blame Herbert Hoover at the time but the republican party as a whole must share the blame.

Impact on Japan:

  1. Japan had limited resources so the country was devastated by the great depression, with its prosperity heavily linked to foreign trade such as the silk industry crashing

  2. Nationalist claimed that Japan’s embracement of western values caused the depression ,also arguing that lack of spaces and resources caused depression

  3. Expanded into Manchuria arguing for its great benefit for Japan

  4. Japan then became more authoritarian (with the military having control over the emperor and government), using censorship and arresting government officials.

  5. Finally in 1937 then invaded proper China, even though League of Nations was aware of Japan’s brutality they did not assist China

  6. Japan left the league of nation when France and Britain enquired on its practices.

Impact on Germany:

  1. 6 millions germans unemployed, real wages falling by 1/3, mostly people under 25 years were unemployed

  2. This made the NAZI and the Communist party an escape from Germans problems for many

  3. USA investors pulled out money and the US government demanded reparations.

  4. Marked the end of Weimar Germany golden age

  5. The grand coalition composed of Pro-democratic parties broke apart then in 1930 election communist and NAZI have a rise in votes

  6. Democracy ended as Hindenburg used emergency decrees (Article 48) to pass many bills not using the Reichstag.

  7. Army began to have a lot of impact on politics