Political effects of the Great Depression?

Question

The depression of the USA

Answer 1

The people in the U.S.A. and other western countries started to look at different forms of government than the one they had. People started investigating and becoming members of the communist party, socialist parties, people like Huey Long who was the corrupt governor of Louisiana, Father Coughlin a priest who had a popular radio show started their own political parties. This totally freaked out the US government because they knew they could be on the verge of another revolution. That is why when Franklin Roosevelt came into power he instituted the 'alphabet' programs to help people

get jobs and to get off the dole.  By the way this early flirtation with communist/socialism would cost people dearly in

the 50s when it would come back to haunt them during the McCarthy era. They would be branded as communists and

'tools' of the 'Reds" They would lose their jobs, their friends

and be blacklisted for decades for attending a couple of

meetings and that is all.

Answer 2

trade stoppd between most conuntrys.. in japan it caused the manchuirian crisis as japan had no resources coming in.

a lot of people losst their jobs..

countrys were soo weak so the league of nations failed, as britian and france coudlnt help any countires, they had problems of their own.

britain and france followd appeasment, they didn wnt war cuz they had no money 4rm the great depression!

umm..ye cant fnk of nefin else reli x

Answer 3

The introduction of the discussion will focus on the origins of

the Great Depression and the escalating events that led to it. This

will provide adequate foundations to bring up questions and attempt to

answer them in an objective fashion as to why and how the Depression

affected different industrialized countries in different ways.

        The core of the debate will consist of detailed comparable

analyses of the consequences of the Depression with an emphasis on

the economic aspects. The conclusion will provide a brief overview of

the ways used by the different governments to get out of that dark

episode of world economic history.

        When studying the Great Depression and it's effects, it is not

unusual for historians to choose World War I as a starting point for

their investigation. The reason for that is the importance of the

repercussions the conflict had on the economies of all the countries

that were involved in it.

        First of all, the War made it impossible for Europe to

maintain previous levels of production. For example, before the War,

France, the U.K. and Germany accounted for about 60 percent1 of the

world's exports of manufactured goods, a share of the market which

they could not sustain during the conflict. Consequently, Europe took

many of its markets to the U.S. and Japan. The stunted growth of the

European economies meant a lower demand for raw materials, which in

turn lowered the demand for European exports.

        In agriculture, things didn't look any better, as it was the

sector which employed the most people. At the end of World War I,

Europe was forced to import food from the U.S.. Moreover, these

transactions were conducted on a credit basis since Europe could not

afford to pay for its purchase at that time.

        Clearly, the U.S. was going from being a traditional debtor of

Europe before World War I to becoming its creditor: America had

financed the war and it was issuing loans for its reconstruction.

However, the attitudes in the U.S. were evolving in an unusual

direction: an increasing number of American financiers were starting

to literally seek ut potential borrowers which led to competition

among U.S. banks and the spreading of unsound lending.2 The main

object was to "do the most business", even at the expense of essential

caution.

        What seemed like a beginning of recovery from the Great War,

was in fact an immense accumulation of debts, which made the

international economic order vulnerable to depression. Analyzing these

events with the insight we have today, they seem even more

unbelievably audacious given the high instability of the borrowing

nation. (i.e., Europe)

        The triggering event was the crash of the Wall Street stock

market in October of 1929. The stock market collapsed after steady

declines in production, prices and incomes over three previous months

which forced the speculators to revise their expectations. Anxiety

soon gave place to panic which led to the crash. However, the

depression affected the different industrialized countries in various

ways and degrees of intensity.

        The depression was of especially great magnitude in the U.S.

because there were not any welfare benefits for laid off workers. In

the period between 1929 and 1933, money income fell by 53 percent

(real income fell by 36 percent.)3 As a consequence, demand fell

significantly, which in turn led to lower production and more

layoffs-- up to a high of 25 percent rate of unemployment in 1933.

        Despite the severity of the situation, the Federal Reserve did

not pursue a monetary expansion on policy which would have stimulated

the economy through lower interest rates and increased the stock of

money in circulation. This inaction is often attributed to the fact

that market interest rates in 1930-1931 fell to very low levels, much

lower than in the earlier recessions (of 1924 and 1927), and

therefore, the Federal Reserve Board wrongfully saw no need to pursue

an expansionary monetary policy.4 An indicator of that inaction is

that open market operations did not provide sufficient money reserves

for a banking system faced with depositors anxious for liquidity

(monetary expansion would have filled that need). If the Federal

Reserve had provided additional funds to the banking sector after

1930, bank failure would not have been so numerous and the decrease in

the attack of ???? would have been (at least) slowed down.

        Still, it would not be accurate to make the Federal Reserve

responsible for all these problems. Other factors contributed to the

precipitation of what began as a cyclical recession into what we now

know as the Great Depression. One of those is the Hawley Smoot tariff

of 1930 which in essence made America more protectionist than ever,

sending import duties to record highs. Evidently, retaliation from

other countries was quick to come. The new tariff act accelerated the

downfall of American trade volume, which was probably the last thing

the U.S. needed at that stage. President Hoover had always been in

favor of protective tariffs which he considered a strictly domestic

issue and he supported the Howley Smoot Act. Therefore, he clearly

failed to see the implications of such a move.

        Soon, the Depression was spreading to the rest of the world,

especially to Europe. There, the single country that was most affected

was Germany whose very weak economy could not cope with the slow

disappearance of American capital. Let us mention that Germany was

still paying reparations (for World War I), which made its situation

even more delicate. Germany was forced to borrow from Great Britain

and France which could not compensate for the decline in U.S.

lending.5 The trap in which Germany found itself was quite

disconcerting: she had to pursue deficienary policies to gain the

confidence of investors in order to attract foreign funds. At the same

time, devaluaton posed a major problem. It increased the burden of the

external debt (through the exchange rate mechanism) which was payable

in foreign currencies.

        The United Kingdom represented another major force on the

global economic scene. The British economy was not hit immediately as

violently as Germany's. However, as the repercussions of the world

crisis became increasingly clear, Great Britain experienced a notable

decline in its exports which was even greater than the decrease in its

imports. Those two factors contributed to generate a deficit in its

balance of payments.

        Still, compared to most other industrialized countries, the

U.K. got through the Depression in better economic health.6 In the

case of France, things went a significantly different way. First of

all, out of the four biggest industrialized countries of the time

(U.S., Germany, U.K. and France), France was the last to be hit by the

Depression. Many possible reasons are hypothesized to explain that

fact, but the one that is most often heard is the undervaluation of

the French franc.

        The French economy began to feel the effects of the world

crisis in 1932. Around that time the Depression caught up with the

French economy through an important decrease in its exports (due

impart to the shear downsizing trend in the volume of world trade),

combined to an increase in imports. The problems faced by France were

also worsened by the fact that it still was maintaining the gold

standard long after all of the other industrialized countries-starting

with Great Britain in 1931--had switched to fleeting exchange rates.

        As for Japan, we can safely say that it is the one country

among today's industrialized nations that got through the Great

Depression with the least damage to its economy.7 Now that we have

illustrated how the world crisis affected various nations in different

ways, it seems only logical that they would put together solutions

that were adapted to their individual problems.

        In the United States, Hoover had failed to bring a solution to

the Depression, and he was replaced by Roosevelt in 1932. The new

president brought with him the New Deal, which can be qualified as a

collection of programs aimed at stimulating different sectors of the

economy (like the Agricultural Adjustment Act and the National

Industrial Recovery Act). As it turned out, the New Deal was not a

particularly successful economic initiative, but it was definitely a

political success, probably because its goal was to help the American

people (even though the means used to accomplish that were never very

clear). What proved more effective at bringing economic solutions to

what was really an economic problem was the "Keynesian theory". In

1938, Roosevelt, facing the semi-failure of his New Deal, finally gave

in to an increasing number of his close advisors who were confident

that Keynes' ideas would be more successful.8 The underlying theory to

Keynes' ideas was that recovery could only come through fiscal

expansion--in other words, running a bigger budgetary deficit. The

additional expenditures were pumped into the economy through a variety

of government actions--like major public works--in order to stimulate

demand by providing people with income.

        In Germany, the n***s' victory at the 1933 elections was a

major accelerating factor on the road to recovery. The n**i program

aimed first and foremost at the reduction of unemployment and it did

accomplish at least that. However, the realization of the plans was

conditioned by an omnipotent government which was best described by

Peter Hayes' analogy (1987): "It is perhaps accurate to say that, to

German industry, the emergent  

Answer 4

This was one of the triggers which allowed Hitler to take over Germany believe it or not. People needed an extremist leader in order to sort out extreme times (depression)