Impact of Great Depression

• The Wall Street Crash that took place in Oct 1929 in the USA caused a global economic disaster which led to a decade of depression known as the Great Depression.
• The global financial collapse led many countries to elect more extreme governments and as a result powerful dictatorships emerged because of the Great Depression.
• In Germany Hitler and the Nazis came to power and they offered radical economic solutions such as rearmament and ignoring the terms of the Treaty of Versailles.
• In Italy Mussolini tightened his grip on the country by taking over banks and industries and vowing to build the Italian Empire up again.
• In Japan the Japanese trade was severely affected by the economic downturn. A military dictatorship was formed.
• Germany, Japan and Italy all had military ambitions now that threatened to destabilise international peace.
• Britain and France adopted a more nationalistic approach to deal with the effects of the Great Depression by putting tariffs to limit or stop imports. This was known as protectionalism.
• The League of Nations failed to protect Manchuria. In 1931 Japan decided on military expansion to seize resources for their economy. They staged an attack on a Japanese railway line in Manchuria and used this as an excuse to invade. The League condemned this and ordered them to withdraw but took a year to make this decision (The Lytton Report). Instead of following the orders of the League Japan invaded more of Manchuria and in 1933 left the League.
• The Abyssinian crisis - In 1935 Italy invaded Abyssinia as Mussolini wanted to build up Italy’s empire and thought Britain and France would not stand up to him. The League imposed sanctions on Mussolini but he had already build up his war resources. Britain and France refused to close the Suez Canal and in a secret deal behind the back of the League (Hoare-Laval Pact) tried to give Mussolini two thirds of Abyssinia in exchange for his support against Germany. The pact was discovered and the League’s reputation was ruined.
• The Rome-Berlin Axis was signed. This meant that Mussolini had abandoned Britain and France and signed an alliance with Hitler.