The impact of the Great Depression

Social, political and economic impact World economy into collapse; bankruptcies in the USA ( 30% out of work) and in other nations Impact on international relations; the end of co-operation ( Dawes, Young, Locarno, Kellog-Briand) Did not hit the USSR ( did not trade with other states) The policy of increased protection → world trade into rapid decline ( 70 % between 1929 and 1932) The debt problem ( see p. 163)

Failure in economic co-operation Countries blamed each other which limited attempts of co-operation USA´s Hoover ready for one-year suspension of debt payments, finally France and Britain for that plan as well. Germany would be able to pay in the form of government bonds ( USA should go for the continued postponement of debt repayments = Lausanne agreement) → US Senate refused the deal and back to the Young plan Hitler to power: Germany rejected the plan; only 3 billion out of 10 billion was repaid to the US Economic nationalism, autarky/ self-sufficiency encouraged

Political impact The rise of political extremism: Hitler, Mussolini´s power justified by the depression, Japan; both production and employment fell by 30 % between 1929 and 1931! - relied on the import of raw materials ( protective tariffs made it worse) - the demand of the luxury products collapsed and prices fell (lucrative silk) - 50 % of mining and heavy industry were forced to close down

Japan With the growing population ( 1 million per year) Japan faced serious problems, poverty Military and patriotic groups increased their power with easy solutions ( calls for expansion → invasion of Manchuria )

Britain In Britain the social and economic impact of the Depression varied according to the region in which people lived - traditional industries like iron, steel, cotton and shipbuilding were located in the north, north-west and those suffered most - those in the south or east who had employment enjoyed the period with relative increasing prosperity with the increase of real incomes and low interest rates Democracy was never really threatened, no mass support for political extremism Welfare cuts to keep the budget in balance; people ( the majority) satisfied with that policy

France Greater self-sufficiency protected France in the beginning of the 1930´s, later the impacts hit France more seriously ( unemployed in 1935) Germany did not pay reparations, 33 % fall in government income, government finances faced problems Political unrest; riots and strikes Rise of extremism ; fascist groups mounted The constant change of ministries made it difficult to pursue a clear policy; between 1930 and 1936 there were 18 governments →paved the way for the German occupation

USA