5: GCSE History - the Great Depression & the League of Nations

Main ideas and lessons

• The Great Depression began in the US (Oct 1929) after the Wall Street Crash:

  • Many people (not just wealthy investors) bought shares in the stock market.
  • Shares became overvalued, then investors realized prices were too high.
  • Panic selling began: investors sold quickly as share values fell, which drove prices down even further.
  • This created a rapid economic collapse: banks closed, businesses failed, and mass unemployment followed.

• How the Depression spreads and deepens (vicious circle):

  • Normally: consumers buy goods/services → businesses pay workers → workers earn money → consumers buy more.
  • During the Depression, people lose money and buy far fewer goods.
  • Businesses then:
    • produce less because demand is gone,
    • make less profit and lay off workers,
    • which reduces wages and further lowers consumer spending.
  • This forms a feedback loop of worsening depression.

• Protectionism worsened the global crisis:

  • Many countries raised tariffs (taxes on imported goods) to protect domestic industries.
  • Instead, this collapsed international trade, harming everyone.

• Economic impacts spread globally through trade and finance:

  • Trade knock-on effects (US reduced imports; examples given):
    • Less silk from Japan → crisis in Japan
    • Less demand for rubber and tin → price drops in Burma/Malaysia/Thailand
    • Less wool purchased in Australia → wool price collapse and farmer crisis
    • Less beef bought in Argentina → beef price collapse and national crisis
    • Less coffee demand in Brazil → crisis
    • Fewer US factory purchases of African raw materials → African economies hit hard
  • Financial shock:
    • American banks stopped lending to European businesses
    • This contributed to bankruptcies and loan recalls, especially harming Germany.

• US economic decline illustrated by exports and prices:

  • Automobiles:
    • 1928: 4.5 million cars produced for export (vs. Western Europe’s combined ~0.5 million total output)
    • 1929: automobile export value over $500 million
    • 1932: fell to $76 million
  • Agriculture:
    • Wheat exports fell from $200 million to $5 million
  • The Depression’s effects coincided with a climate crisis in the US Midwest, increasing poverty/hunger and strengthening US isolationism.

• Isolationism shapes international politics and conflict:

  • President Franklin D. Roosevelt (elected 1929) promised the “New Deal”:
    • intended major government spending to revive the economy
    • but he needed support from isolationists for domestic spending, so the US focused inward
  • US isolationism made Britain and France cautious because they believed the US would not help.
  • This encouraged fascist expansion, specifically referenced through:
    • Italy’s invasion of Abyssinia (Ethiopia)
    • the League of Nations “should” have used sanctions, but the US—outside the League—continued selling oil to Italy, weakening the League’s effectiveness.

• Germany was hit worst; the Depression helped Hitler rise:

  • Germany’s production fell dramatically (example: 60% drop from 1928 to 1932).
  • Unemployment rose to about one-third of working-age people by 1932.
  • Consequences described:
    • family hardship, hunger, homelessness risk
    • major suffering for farmers and factory workers due to falling agricultural prices and falling wages/unemployment
  • Political “solutions” offered by Adolf Hitler and the Nazi Party:
    • used simple slogans: “Work and bread”
    • parallels drawn to Lenin-like slogans
  • Nazi growth (example figures):
    • 1928: 12 seats in the Reichstag
    • Sept 1930: 107 seats
    • by July 1932: Nazi vote rose to 230 seats
  • Factors explained:
    • rise of Communist Party support alongside the Nazis
    • unemployed people joined street gangs (communist or Nazi), leading to violence
    • Hitler’s Brownshirts projected “order”
    • mass rallies and crowd psychology helped create a sense of organization.

• Britain and France respond differently, with declining resources:

  • Britain:
    • industrial destruction,
    • increased concern with empire,
    • government budget limits reduced defense spending in the early 1930s
    • Britain lacked financial/military capacity to fight both Japan and Germany at once
    • thus became cautious about conflict.
  • France:
    • A quote attributes to Joseph Goebbels (Nazi propaganda minister) the idea that France failed to act in 1933 when Hitler came to power.
    • Key claims:
      • Germany was still militarily weak in 1933, so France could have intervened
      • but chose not to, allowing rearmament
    • France faced internal economic and political constraints:
      • more agrarian economy delayed industrial crisis impact
      • government struggled to pay World War I veteran pensions
      • reduced defense spending; focus on the Maginot Line
      • government divided between left-wing communists and far-right extremists, making coordinated opposition harder.

Methodology / “how it works” (detailed bullet format)

• Mechanism of economic depression (vicious circle):
  • Start: general public loses money during the Depression.
  • Result 1: consumers buy significantly fewer goods and services.
  • Result 2: businesses receive less cash from sales.
  • Business response:
    • reduce production (“why produce if you don’t sell?”)
    • reduce workforce because profits are insufficient to keep employees.
  • Labor effect:
    • layoffs → reduced wages → even less money for consumers.
  • Continue:
    • lower wages → lower consumer purchasing → further sales decline for businesses.

Speakers / sources featured (as named in the subtitles)

• Franklin D. Roosevelt (US President; referenced for the “New Deal” and isolationism)
• Adolf Hitler (leader of the Nazi Party)
• Joseph Goebbels (Nazi propaganda minister; quoted)
• Lenin (referenced indirectly as a comparison to Nazi slogans)