Great Depression Causes

On October 29th, 1929, the New York Stock Exchange collapsed, falling over 12% in value . The subsequent lack of confidence in the markets led to a worldwide economic disaster known as the Great Depression. The concomitant rise in unemployment, drop in wages, and GDP stagnation left people around the world jobless and starving . The depression undermined the priority of diplomacy, sabotaged previous attempts at global reconciliation, and engendered the rise of far right extremist groups. Nationalist factions further impeded world relations, sparked aggression, and turned popular sentiment into contempt. While there were many different factors that lead to the breakout of the Second World War, it was ultimately the economic crisis and its effects …show more content…
Unable to repay the incredibly high sum demanded, Germany defaulted on their debts in 1923, and world leaders scrambled to find a way to correct the crisis without forgiving the debts entirely. A proposed solution, the Dawes Plan, suggested that the US lend Germany money to pay back Britain and France; it was passed in 1924. While the plan succeeded in stabilizing the German economy, it forcibly tied Germany to the American economy, a prospect that did not please the Germans, especially as this exemplified Germany’s fall after the American economy collapsed in 1929. The extreme requirements of the Dawes plan lead to its replacement by the Young plan, which reduced Germany’s required reparations to only $29 billion, but further increased German dependence on the United States. Thus during the advent of the Great Depression, Germany’s economy suffered doubly. As Germans viewed their crisis as a consequence of the Western demands, diplomatic relations between Germany and the West strained. In addition, the United States lent Britain and France a combined $10 billion during World War I, which Washington demanded to be repaid after the war. While the West eventually forgave all German reparations in the 1932 Lausanne Conference, the US, …show more content…
The government in power since the Treaty of Versailles, known as the Weimar Republic, had acquiesced to economic and political deals (like the Dawes and Young plans) that seemed to put Germany at the West’s mercy, and which crushed Germany during the Depression. As Hitler would say in a speech given in 1940, “No people felt the effects of this economic depression more than the Germans. The general economic disorganization led, particularly in Germany, to a widespread joblessness that almost ruined [the] German people.” Jobless, impoverished, and frustrated, Germans turned against the weak government, and nationalist parties like the Nazi party gained support, promising to correct the misdeeds of the Republic. Charismatic and persuasive leaders like Adolf Hitler translated German fears into resentment against the West. Fueled mostly by farmers, the working class, and the unemployed, the Nazi’s gained power in the legislative Reichstag, and assumed full control of Germany by 1933 . After gaining power, Hitler attempted to rectify the German economy and national identity by expanding Germany’s territories eastward and southward and nationalizing all industry for military rearmament. Much of the motivation for this policy was an attempt to achieve an empire like that of France or Britain, which Germany believed it had been

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Causes Of The Great Depression