13 million people. That’s the amount of unemployed people in the US during in 1929. Why? The great depression. On October 24, 1929 the stock market crashed because consumers were buying less leading to surplus of goods, however stock prices were still rising until the point where they were no longer justified by future earnings. Many investors tried to sell their shares, which were now deemed worthless, as others went broke. The Great Depression slowed factories production as consumers were buying less and less, but not only did this affect American companies, it had an impact throughout the world.
In France, the depression meant that 1 million French workers would be left unemployed. When people saw that the economy was failing, they turned to politics. Communists, moderates, and socialists formed a coalition called the Popular Front. The growth of anti-democratic forces began to increase, and Popular Front created many reforms. However, those reforms all eventually failed because “price increases quickly offset wage gains.” Unemployment was still high at the end of these reforms, but the government remained democratic.
Throughout the 1920’s, Britain’s economy was already struggling to try to pay for the effects of WW1. When the US stock market crashed, this meant an even more economic struggle for Britain. Those who were hit the hardest was areas of heavy industry, such as coal, steel, and shipbuilding. These industries were not modernized after the war, causing them to be even less prepared for the depression. The value of British exports dropped by half, and unemployment rose dramatically. In 1931, the pound was devalued by 25%. All of this was particularly devastating considering the fact that Britain was already in debt from the war. World trade dropped 65%. All nations attempted to protect their domestic production by imposing tariffs. These restrictive measures decreased global trade significantly. The economic collapse created a coalition called the National Government that passed higher taxes, protective tariffs and a more regulated currency. To encourage industrial growth, they lowered interest rates. Despite that, Britain maintained democracy and avoided political extremes.
The depression affected Spain differently than it did for France and Britain because Spain was not industrialized at the time. Their economy was largely dependent on agriculture, so they had to work with completely different problems. The rapid price deflation caused by the depression was a major disruption, but aside from poverty and economic failure, this event led to much more drastic things. It played a role in the rise of the Spanish Civil War, as well as influenced how other countries reacted to it.
The depression crippled the German economy. Germany was already deeply indebted to the United States, so the stock market crash hit them especially hard. Unemployment rose as of late 1929, and this affected about 25% of the workforce. This was made worse by the enormous reparation cost imposed upon them after WW1, and the economic struggle it faced led to the rise of Nazism. In attempt to pay of their debt from the war, the German government printed an excess of money, resulting in extreme deflation. Hitler took advantage of Germany’s weak financial state to take power. WW1 definitely left a huge impact on how Germany handled the Great Depression. The aftermath of the war meant huge debt, reparations, and political instability, all which worsened the financial struggles. This pushed people to be in favor of right wing, dictatorial governments.
The Great Depression was a drastic historical event which affected many countries, and those effects spanned far and wide. The economic failure impacted countries not only financially, but politically and socially. Many countries were still struggling to recover from World War 1, so an economic collapse meant that they must deal with many issues at once.