Chapter 18 - Depression's Impact on International Relations

• What was the impact of the Great Depression internationally, excluding Germany (5)

  1. Shift away from internationalism and towards national, isolationist economic policies

  2. Depression made solving the problem of reparations and disarmament worse for the League of Nations

  3. Increased tariffs to ensure protectionism

  4. Removal of some states from the gold standard

  5. As USA had lent $6 billion to Allies + Germany with Dawes Plan, many US companies recalled these loans, however many debtor nations unable to pay
• What was the impact of the Great Depression on the USA? (4)

  1. Investors and banks lost millions

  2. Banks began to fail as people rushed to withdraw savings

  3. Many companies closed down or limited production

  4. Unemployment soared
• Causes of the Great Depression

  The stock market boom of the 1920s led to increased investment in shares -> artificially raised the value of US companies + rise in the use of credit -> drop in value of shares resulted in Wall Street Crash 1929
• What was the Young Plan 1929? (3)

  1. Reduced Germany's final payment sum

  2. Linked British and French debts to reparation amounts

  3. Committed USA to economic involvement in Europe, despite policy of isolationism
• Impact of the Great Depression on trade (4)

  1. USA's Smoot-Hawley tariff 1930

  2. Britain created favourable trade agreements within its empire

  3. Britain's 1932 Import Duties Act

  4. Other nations such as France increased their tariffs in severity and strength
• What was the USA's Smoot-Hawley tariff 1930?

  Extended previous tariffs (eg. Fordney-McCumber tariff) to cover over 20,000 imported goods to protect domestic markets from foreign competition
• What was Britain's Import Duties Act 1932?

  Ended British policy of free trade, imposing 10% tariff on imported goods
• What was the impact of the Great Depression on the gold standard? (3)

  1. Britain removed itself from gold standard due to depression, to ensure more freedom to stimulate own economy, alongside Scandinavian states

  2. This negatively impacted USA as it made their imports more expensive for Britain

  3. Resulted in the British Commonwealth Declaration 1933
• What were the aims of British Commonwealth Declaration 1933? (3)

  1. Rise prices

  2. Plan eventual return to the gold standard

  3. Ensure stabilisation of exchange rates within the states not using the gold standard
• What were the advantages of the gold standard? (2)

  1. Currencies remained stable

  2. Made countries valuable trading partners
• What was the disadvantage of the gold standard?

  Restricted the freedom of individual economies
• Impact of the Great Depression on Germany

  Weimar government failed to resolve the impact of the economic crisis -> subsequential unemployment resulted in a decline of support for the ruling parties and democracy -> popularity of the Nazi party and the Communist party soared
• Why did support for the Nazi party soar after the Great Depression? (3)

  1. Many impressed by Hitler's impression of order and stability

  2. Hitler promised to provide jobs + support small business owners

  3. Nazi party promised economic stability
• Qualities of the Nazi party (4)

  1. Based on fascism

  2. Advocated resurgence of Germany as a world power

  3. Blamed Jews and communists for German defeat

  4. Believed German race ('Aryan') were superior
• What was the Hoover Moratorium 1930? (2)

  1. Germany asked US President Hoover to consider a moratorium for reparations (temporary suspension of repayments) due to impact of Depression

  2. Supported by Wall Street Investors (concerned Germany wouldn't be able to honour repayments without it)
• Impact of the Hoover Moratorium 1930 (3)

  1. Short term measure only

  2. Germany not allowed to use savings for armaments

  3. Criticised by France, who saw it as an Anglo-American agreement to help Germany at the expense of France
• Events of the Lausanne Conference 1932 (3)

  1. Ended reparations, with Germany paying final lump sum of 3000 million marks (10% of debt) to Bank of International Settlements

  2. 'Gentlemen's agreement' between creditor nations -> ultimately amounted to debtors cancelling their own debts

  3. Agreements cancelled out economic terms of Treaty of Versailles + Young Plan
• What were the opposing ideas at the Lausanne Conference? (2)

  1. Papen (German Chancellor) -> said reparations were dangerous and unrealistic

  2. Herriot (French Prime Minister) -> said Germany could afford to pay reparations but chose not to
• Outcome of the Lausanne Conference (5)

  1. Lausanne protocol never ratified as creditor nations agreed not to proceed until they had decided how to compensate USA for remaining debts

  2. USA unhappy with 'gentlemen's agreement'

  3. Final payment from Germany never materialised

  4. Caused France to distance itself from USA

  5. Nazis used fact they still had debts + couldn't rearm as propaganda -> seats in the Reichstag doubled
• Aims of the London Conference 1933 (5)

  1. Restore economic confidence + raise prices

  2. Stabilise the currency

  3. Encourage more economies back to the gold standard

  4. Halt protectionism

  5. Increase world trade
• Main concern of France at the London Conference 1933

  Desperate for Britain to return to the gold standard (blamed this for the slump in world trade)
• Main concern of Britain at the London Conference 1933

  Abolish the war debt
• Failures of the London Conference 1933 (3)

  1. Proposals to fix the value of the USA dollar at a low rate to stabilise the currency rejected by Roosevelt (wouldn't accept any proposal which may limit USA's recovery from the Depression)

  2. No agreements made on protectionism or industrial recovery

  3. Britain had made it clear in 1932 they had no intention of returning to the gold standard or abandoning tariff arrangements with their empire
• Impact of the failure of the London Conference 1933 (2)

  1. Germany adopted policy of autarky (economic self-sufficiency)

  2. Japan turned to aggression+ empire building to improve their economy
• Attitudes to disarmament previous to 1932 World Disarmament Conference (2)

  1. Weak enthusiasm among governments for limiting weapons

  2. Countries now seeking national, isolated solutions to problems following the Depression
• Resolutions made at the World Disarmament Conference 1932 (3)

  1. Size of tanks and artillery limited

  2. Civilian bombing banned (although many nations reluctant to stop building planes with capacity to drop bombs)

  3. Chemical warfare banned
• German rearmament (2)


  1. Weimar government started 5 year secret rearmament programme in 1928 to expand the army + build more planes and tanks

  2. Hitler rearmed on a more ambitious scale + withdrew Germany from the World Disarmament Conference and the League of Nations 1933