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Global Effects of the Great Depression

Global Effects of the Great Depression. The 1930’s: Between the Wars. United States. Great Depression originated here with the stock market crash on October 24, 1929 (Black Thursday. Or Tuesday. Or Monday.) Severe drought in 1930 caused further economic damage to the agricultural industry

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Global Effects of the Great Depression

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  1. Global Effects of the Great Depression The 1930’s: Between the Wars

  2. United States • Great Depression originated here with the stock market crash on October 24, 1929 (Black Thursday. Or Tuesday. Or Monday.) • Severe drought in 1930 caused further economic damage to the agricultural industry • Central banking gave loans they shouldn’t have, people panicked and withdrew savings, banks closed • Devaluation of the American Dollar led to the end of the Gold Standard, changing to a fiat currency (money that exists because an authority or custom declares it to be money) • Unemployment rate reached 25%

  3. Worldwide stats • International trade plunged 2/3 • Cities dependent on industry were hit hard • Crop prices dropped 60% • Most countries underwent government run relief reforms • Most countries moved politically to the right or left in search of a better structure (FDR, Hitler, Stalin, etc.)

  4. Europe • Economic decline had been coming for awhile, but the NYSE crash was the final catalyst as many wealthy Europeans had invested in it • Credit structure collapsed in 1931, withdrawing loans from U.S., further damaging them • Several countries turned to leaders that promised better times and a change, even if their ideas were radical • Suffered low wages, unemployment, growing dependence on military production (Germany) • Forced colonies to buy only European products • ½ German population lived in poverty

  5. Asia • Depended on rubber and tin trade with the West (automobile industry) • Companies in Asia had much less profit because of lack of sales • Japan lost money on silk production as synthetic fabrics were invented • Japanese exports dropped 50% • Bad harvests and unemployment • India created import duties and stayed level • Results: suspicion of West increased, Japan tried to seek more Asian markets

  6. Latin America • Had a strong economic tie to the U.S. • According to a League of Nations report at the time, Chile, Peru, and Bolivia were the hardest hit countries in the world • Fascist governments rose in popularity as a result, particularly in Brazil • Industrialization began finally in Brazil only • Many colonial areas depended on the sale of their agricultural exports to afford industrial imports, but couldn’t any longer • Results: greater state planning in economy, new political ideas imitating dictatorships in Europe

  7. Not just an economic depression • The Depression directly contradicted the attitude of the 1900s that prosperity was forward moving progress (CCOT) • It challenged the idea that democracies could control their countries and always be successful • Interrupted industrialization, except…

  8. Not effected… USSR • The Soviet Union was busy industrializing, collectivizing, communizing… • Genocide under Stalin “cleansed” the lazy, the unwilling, the doubtful, and those related to them • Also Southern Africa prospered as gold became more important (before dropping the gold standard)

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