The Impact of the Depression on the League of Nations | History for GCSE/IGCSE - Year 11 PDF Download

The Wall Street Crash

• During the 1920s, the United States witnessed a period of economic prosperity.
• Repayments from Britain and France for wartime loans bolstered the US economy, leading to a surplus of money.

Stock Market Crash of 1929

• Share prices started to decline, triggering a panic among shareholders.
• Investors hurried to sell their shares to prevent significant devaluation.

The Great Depression Unfolds

• Between October 24th and October 30th, 1929, the American economy faced a severe collapse.
• October 24th, known as 'Black Thursday', marked the most devastating day of the crash.
  • Approximately 13 million shares were sold, leading to a sharp decline in prices.
  • Shares that had a value of $20,000 in the morning plummeted to $1,000 by day's end.
  • Investors collectively suffered losses amounting to $4 billion by October 30th, 1929.

Key Events of the Wall Street Crash

• People sold 13 million shares
• Prices plummeted due to the amount of shares available
• Shares that were worth $20,000 on the morning of 24th October 1929 were worth $1,000 by the end of the day
• By 30th October 1929, investors had lost $4 billion
• This event is called the 'Wall Street Crash' as Wall Street is where the Stock Exchange is based in New York

Impact of the Great Depression

• The global economic downturn triggered by the Wall Street Crash of 1929 had far-reaching consequences in the 1930s for the following reasons:
  • The Dawes and Young Plans established financial ties between the US and European nations, leading to interdependence.
  • In a bid to stabilize its own economy, the US demanded repayment of all its loans, creating a financial crisis in Europe.
  • Germany, heavily reliant on US support, faced economic turmoil when this aid was withdrawn.
  • International trade significantly declined, exacerbating the economic slowdown.
  • Political leaders promoted the purchase of domestically produced goods to stimulate local employment.
  • Governments imposed higher tariffs on imported products, hindering international trade further.
  • This reduction in global trade worsened the economic conditions worldwide.

Extremism and Militarism

• Due to economic challenges, a shift in public sentiment occurred towards governments.

Why Did Extremism Increase in the 1930s?

• Government Blame: People held their governments responsible for the economic crash.
• Extremist Alternatives: Extremist parties proposed alternative solutions to government policies during the Great Depression.
• Nazi Promises: The Nazi Party pledged to overturn the Treaty of Versailles and restore Germany's strength.
• Rise in Dictatorships: There was an increase in dictatorships during this period.
• Key Dictators by 1939:
  • Mussolini in Italy (1922)
  • Stalin in the USSR (1924)
  • Hitler in Germany (by 1934)
  • Franco in Spain (1939)
• Autocratic Leadership Belief: Some populations believed that a strong, autocratic leader could better rebuild the economy compared to a democratic government.

Why was Extremism an Issue for the League of Nations in the 1930s?

• Radical Solutions: Extremist parties promised radical solutions to their citizens.
• National Focus: Extremist leaders prioritized their own country above all else.
• Fascism vs. Communism: Fascism and communism represented opposing ideologies.
• Limited Cooperation: Fascist and communist dictators were less likely to collaborate.
• Aggressive Policies: Extremists adopted aggressive foreign policies to prioritize their countries.
• Disregard for the League: They had no respect for or interest in the League of Nations.
• Neglect of League Duties: Non-extremist leaders began to neglect their responsibilities to the League of Nations.
• Protection from Extremism: They prioritized protecting their people from the threats of communism and fascism.
• Nationalism: Leaders sought to strengthen their countries through nationalism.

A Solution to the Great Depression - Militarism

• Definition of Militarism: Militarism involves the belief that a nation should maintain a robust military force.
• Economic Impact: Militarism played a significant role in diverting attention away from the economic downturn of the Great Depression. It achieved this by creating job opportunities in the defense industry, specifically in rearmament businesses.
• Boosting National Pride: Additionally, militarism instilled a sense of pride and patriotism among civilians, fostering a renewed sense of national identity and unity.

Why was Militarism an Issue for the League of Nations in the 1930s?

• Militarism conflicted with the League's fundamental goal of disarmament.
• The League faced the challenge of curbing aggressive actions by nations that:
  • Threatened others by leveraging their substantial armed forces.
  • Engaged in territorial expansion through invasions to build empires.
  • Initiated wars.
• The League lacked the military strength of the United States, while France and Britain hesitated to allocate funds to prevent international aggression.
• These nations were still recovering from the economic downturn of the Great Depression, making them reluctant to engage in costly military endeavors.
• Countries recognized the League's weakness during the 1930s, realizing that a robust military presence could intimidate the League into ruling in their favor.

Rearmament and Unemployment

• Nazis in Germany utilized rearmament as a strategy to alleviate unemployment issues. 
• In 1933, Germany withdrew from the League of Nations due to Europe's refusal to disarm, a move that Hitler interpreted as justification for rearming the nation. 
• Subsequently, in 1935, Hitler implemented mandatory conscription, and by 1938, Germany was allocating 20% of its GDP towards rearmament efforts. 
• This initiative significantly boosted employment, providing job opportunities for millions of unemployed individuals.

Impact of Rearmament on Unemployment