A. The Great Depression.
The devastating of the First World War left the economies of nations severely damaged, and the Allies imposed heavy war reparations on Germany and her allies. The costs of war and the payment of heavy loans left the Germans utterly in debt, and this combined with several other factors triggered by political decisions caused the Great Depression which led to the collapse of economies of European countries and the USA. Most of the European countries attempted to increase their production to pre-war levels but were hampered by the loss of the market for finished goods. Countries quickly imposed tariffs on foreign exports, encouraging the local population to purchase goods made by indigenous industries. Protectionism, Congressional tariffs, and speculation further contributed to the stock market collapse of the United States, and the constant decline in the buying of shares. By 1933, most of Europe and the USA were in the clutches of the Great Depression, leaving many unemployed.
Further Explanation-
The United States had a very profitable and booming economy in the pre-war years and her levels of industrial production had reached its peak during the war years. After 1917, the USA emerged as the main financier of the war and provided loans to Britain, France, Italy, and Russia. The devastating effects of the World War left the economies of Britain and France completely shattered, and they burdened Germany and forced her to pay war reparations for the devastation caused during the war. The British and the French procured loans from American banks to rebuild their economy, however, the American banks did not have enough money to float any more loans and called back the loans. This caused immense pressure on the European countries, who could not return the American loans, and their currency had fallen drastically. The failure to pay loans back depleted federal reserves, and there were not enough reserves to keep the American currency from falling. A lot of Americans panicked and sold their shares, which reduced share prices drastically..
Learn more:
1. what did us car companies produce during world war ii?
2. From which country did the united states need to buy rights before building a canal across central america?
3. Why were so few violations of the sherman antitrust act brought to court?
Answer Details-
Grade- High School.
Chapter- The Great Depression in the United States.
Subject- History.
Keywords-
Great Depression, stock market crash, economy, war reparations, economic devastation, loans, recalling of loans, stock crash, federal reserves.
