The Impact of the Worldwide Economic Depression

1929 – The Worldwide Economic Depression

World trade boomed in the late 1920s
The USA was the richest nation and American business was driving the global economy
Every country traded with the USA and many took loans from their banks
Internationally, economies were recovering and growing which settled tense relations
This period of prosperity ended suddenly in October 1929 when the US stock market, Wall Street, crashed
- Too many goods were made, too much food was produced, amongst other causes
This was the start of the Great Depression – a 10-year period of economic decline
The internationalist spirit was replaced by nationalism again
- Protectionism – some countries introduced tariffs to limit imports, however this had a domino effect and all countries did the same worsening world trade significantly
- Rearmament – many countries began the process as a way of boosting industry and finding jobs for the unemployed; countries followed suit due to fear of being weak
- American loans called in – the USA had loaned millions of dollars to countries in Europe (mainly Germany) post-WWI however, the banks were running out of money, so the Americans were forced to recall the loans

13+ million people became unemployed
- 6 million unemployed in Germany
5000 banks closed
Industrial production dropped by 45% between 1929-32
House building fell by 80% between 1929-32
Many were homeless, starving and in desperate poverty
Due to protectionism, there was little world trade and worse international relations
Due to rearmament, countries were less likely to trust each other and more likely to go to war
Loss of a main global power caused confusion
People resorted to extremist parties who they hoped would aid them and end the struggle

1920s-30s – The Emergence of Powerful Dictatorships

Germans felt that their government had let them down, so they turned to extremist parties
- By 1933, the most extreme party – the Nazis – were in power
- The Nazi Party believed in aggressive nationalism and was led by Adolf Hitler
- Hitler offered radical solutions to the country’s problems
  - A massive rearmament programme
  - State control of industry and investment projects, i.e. road-building
  - Getting rid of the Treaty of Versailles and ending reparations
- Hitler declared his aims and intentions
  - Reclaim land lost post-WWI
  - Carve out Lebensraum (living space) for Germans in Eastern Europe
  - Destroy communism primarily in Germany but also anywhere it was found
Italy was ruled by Fascist leader Benito Mussolini since 1922
- Fascism was a type of aggressive political nationalism
- Mussolini tightened his grip on the country by taking over its banks and industries after the Wall Street Crash
- Mussolini’s vision for Italy was a threat to international peace
  - He was hoping to conquer territories in Africa to path his way to building a great Italian empire, based on that of the Romans
  - He believed that established powers such as Britain and France were in decline
  - He discussed an alliance with Germany after seeing their similar regimes
WWI caused a revolution in the USSR, causing Communism to reign
- Communists changed the Russian Empire to the Union of Soviet Socialist Republics (USSR)
- The USSR tried to spread communist ideas
- Democracies such as Britain were suspicious of this and feared the USSR were trying to spread communism across the world
- By 1929, Josef Stalin emerged as leader
  - He was convinced that non-communist states aimed to crush the USSR, he felt even more threatened due to Germany and Italy
- He built up the USSR’s resources and industries to be ready for war

1931-33 – The Manchurian Crisis

In September 1931, the Japanese army who controlled the South Manchurian Railway claimed that the Chinese soldiers had sabotaged it
- In retaliation, they overran Manchuria and threw out all the Chinese forces
  - They even set up their own government there in February and renamed it, claiming it was part of the Japanese Empire
Later in 1932, Japanese aeroplanes bombed Shanghai, China
- China then appealed to the League who sailed over to assess the situation
In September 1932, the League presented a detailed and balanced report which made a clear judgement that Japan had broken international law and must return Manchuria to the Chinese
In February 1933, Japan announced the intention to invade more of China
The League conducted a vote that Japan should withdraw from Manchuria, the results were 42:1, the 1 being Japan
One month later, Japan resigned from the League and invaded the province of Jehol
The League was powerless
- Economic sanctions wouldn’t harm them as their main trading partner was the USA who weren’t in the League
- Japan could not be removed by force as only the USA and USSR were strong enough, neither of whom were in the League
- Britain and France didn’t get deeply involved as they didn’t want to risk war by escalating the situation
This destroyed the League’s reputation as they had proved powerless in the case of a strong nation succeeding in pursuing an aggressive policy
Hitler and Mussolini were encouraged by this failure of the League

1932 – Failure of Disarmament

In the 1930s there was increased pressure for the League to address disarmament again, especially in wake of the Manchurian crisis
Herbert Hoover, the US President, encouraged European countries to disarm and offered to reduce or cancel their debts
The Disarmament Conference began in February and agreed to stop the bombings of civilian areas and limit some types of weapons
These rules were agreed however no one knew how to enforce them
Germany was yet the only country to have disarmed since WWI
- At the start of 1933, Hitler took power in Germany and secretly rearmed the country
  - In October, he pulled out of the Conference all together
- By that time, other nations had suspected Germany was rearming so many countries built up their own armies
After this, the Disarmament Conference finished and was disregarded by world leaders
- Hitler publicly announced the rearmament in 1935

Describe the problems caused by the worldwide economic depression. [5]

Outline the emergence of powerful dictatorships in Europe in the 1930s. [5]

Describe the main events of the Manchurian crisis 1931-3. [5]

Explain why the Depression had such a bad effect on international relations. [10]

Explain the failure to achieve disarmament in the 1930s. [10]

‘The most serious challenge to international relations 1929-33 was the Manchurian crisis.’ Explain how far you agree. [10]