Effects of the Great Depression

The effects of the Great Depression were widespread and painful. Here are some facts about the great depression. In 1932, 40% of the banks that existed in 1929, over banks, were wiped out taking money of civilian deposits with them. Industrial stocks lost 80% of their value and international trade was down two-thirds. It was not only the America that felt the effects of the great depression, also people in Europe.

The Great Depression had many serious repercussions in the political world as well as the economic world. Therefore it may have been and indirect cause of World War Two. Germany was still paying reparations to the Allies from World War One and its industry was heavily supported by loans from the USA. So the currents and effects of the Great Depression were to be felt for over 20 years.

Effects on France Out of all of the four biggest industrial nations of the age (USA, Germany, Britain and France), France was the last to feel the effects of the great depression. The main reason for this is the undervaluation of the French Franc. The effects of the Great Depression finally hit France around This began by a significant decrease in its exports led to an increase in its imports. The decrease in exports was largely due to the general downsizing of world trade at the time. Some say the problems facing France were worsened by the fact that it was still maintaining the gold standard, long after the other industrialized nations such as Britain had abandoned it for fleeting exchange rates.

However there are two sides to the gold standard argument. ▫ One may say that with a gold standard France was unable to simple print the way out of trouble e.g. Borrowing money then printing, currency to pay off the debts. ▫ However others may argue that France was able to escape the great depression for three years longer that some other countries. The main difference between France and countries that began to suffer immediately is that France still had a gold standard. This gave them a currency with some actual value, not simply paper money.

Effects on Britain The UK was another key force in the global economy. The British economy was not as swiftly and violently crushed as Germany’s but Britain did suffer a notable decline in imports and exports during the great depression. Britain’s exports decreased even more than her imports and so this produced a deficit in her balance of payments. Compared to other industrialized nations, the United Kingdom scraped through the great depression in relatively good health. The industrial output during the Great Depression.

There were some areas of Britain that were severely affected by the great depression. These were mainly the large industrial towns and cities. Residents of the northeast powerhouses were hit the worst. In Newcastle-upon-Tyne unemployment during the great depression rose to 70% due the collapse in ship building. Ship production fell 90% during the great depression in northern Britain. In Scotland, the highly industrial area of Glasgow suffered dramatically and unemployment rose to 30%

Effects on Germany The country worst hit by the great depression was Germany. Its very weak economy couldn’t deal with the slow withdrawal of American capital. It is worth mentioning that Germany was still paying reparation from World War One, which made its situation all the more precarious. Before the crash, the German economy had been balanced on a knife-edge and it only endured a few mildly successful years before the crash. Germany went through chaos after WW1 and suffered Hyperinflation in Germany was just getting back on her feet when Wall Street Crashed.

The Great Depression lined the way for Hitler and the Nazi’s to rise to power. Before the Wall Street Crash, the Nazi Party only held 12 seats in the Parliament. However in 1932, in the height of the great depression, the Nazi had 230 seats in the Reichstag.