Effects of the Great Depression on America & Europe’s Economy

In modern times the “Great Depression” has been known as the worst severe economic downturn in the industrialized world. The timing and seriousness of the Great Depression shifted significantly over nations. The economic boom of the roaring twenties was especially severe and serious within the United States and Europe; it was milder in Japan and much of Latin America. The Great Depression extremely influenced Central Europe. The unemployment rate in Germany, Poland, and Austria rose to 20% at the same time the output fell by 40%. Every European country had increased tariffs or introduced import quotas by November 1949. Beneath the Dawes Arrange, the German economy boomed within the 1920s, paying reparations and expanding residential generation. Germany’s economy retracted in 1929 when Congress discontinued the Dawes Plan loans. The stock market, centered at the New York Stock Exchange on Wall Street in New York City, was the scene of reckless theory, where everybody from millionaire tycoons to cooks and janitors poured their reserve funds into stocks. As a result, the stock market underwent quick expansion, coming to its top in August 1929. By that point, production had already declined and unemployment had risen, taking off stock costs much higher than their genuine value. Furthermore, wages at that time were low, buyer debt was multiplying, the agricultural division of the economy was battling due to drought and falling food costs and banks had an excess of huge loans that might not be liquidated. As the United States experienced declining yield and deflation, France moreover experienced a moderately brief downturn within the early 1930s. The French recovery in 1932 and 1933, however, was short-lived. French industrial production and prices both fell substantially between 1933 and 1936. Germany’s economy slipped into a downturn early in 1928 and then stabilized before turning down again in the third quarter of 1929. Hoover decisively defeated the Democratic candidate and successfully won the Republican nomination in the 1928 presidential election when he was in his 90’s. One thing that has always been asked was whether or not Herbert Hoover’s response to the economic downturn that began in 1929 was adequate. While Hoover could not be blamed for the Great Depression, his failure to address the nation’s hardships would remain his legacy. After the stock advertisement crash, President Hoover looked to anticipate a freeze from spreading all through the economy. In November, he summoned trade pioneers to the White House and secured guarantees from them to preserve compensation. As the Depression worsened, Hoover requested that the Federal Reserve increase credit, and he persuaded Congress to transfer agricultural excess. World War I exacerbated ancient issues and made modern challenges. The battle to overcome these troubles played a critical part in deciding the character and term of the Extraordinary Discouragement in Europe. Of bigger consequence to Europe’s long-term prospects were many of the financial and economic changes convinced by the war. The disturbance to established patterns of trade was damaging to the European economy and made it difficult to recover the financial costs of the war. It demonstrated difficulty for Europe to recover these markets, especially because of American economic supremacy and matchless quality by its enthusiasm for new technologies, modern innovations, and inventive ways of overseeing labor. With Roosevelt’s choice to support Britain and France within the battle against Germany and the other Axis Powers, defense manufacturing geared up, creating increasing private segment employments. The Japanese attack on Pearl Harbor in December 1941 led to America’s entry into World War II, and the nation’s industrial facilities went back in full production mode. This growing mechanical production, as well as widespread enrollment starting in 1942, diminished the unemployment rate to underneath its pre-Depression level. The Great Depression had finished at last, and the United States turned its consideration to the worldwide conflict of World War II.

During the war, warring states’ indebtedness to the United States, American investments around the world, and loans to Germany completely changed the flow of funds. Due to the custom-house walls, the countries that export to the USA, especially Japan, which meets 1/3 of the silk production of the USA in the 1930s, suffered, and the long-standing problem in agriculture has concluded in increased raw material prices. Raw material prices and commitment to American capital. Two main mechanisms were decisive. One of the first effects is the depreciation of American products in the world market. Since the USA is the world’s largest exporter, its competitors had to follow these prices. For this reason, countries that supply raw materials and agricultural products such as Canada, Argentina, and Central Europe were affected the most by the crisis. Many countries of the world, especially Europe, are dependent on US capital. It deprived the Austro-Hungarian Empire of its power resources and only the American funds kept the country afloat. Its largest bank went bankrupt in May of 1931. The crisis spread to Germany, which had good relations with Austrian banks and was affected by grain exports. After the bankruptcy of Danat Bank, one of the largest banks, the German Government decided to close all banks and savings banks. He announced that he could not pay the war reparations (The Dawes Plan has been shelved). Britain began to deplete its gold stock to compensate for trade deficits. They returned to the “protectionist” policies they abandoned in the mid-19th century and which they have been constantly opposing since. Lastly, especially after the Great Depression in Germany, the worsening economic crisis, unemployment is the most important factor that affected Hitler’s promotion.

Writers: Dafne Ovadya, Yasemin Dindar, Ekin Aluf

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