what factors caused the great depression to spread around the world

Well-nigh two decades after leaving the White House, Herbert Hoover knew precisely where to place the blame for the economical cataclysm that befell his presidency—and it wasn't with him. "The primary crusade of the Great Depression was the war of 1914-1918," the former president wrote in his 1952 memoirs. "Without the war in that location would take been no depression of such dimensions."

The president scapegoated past many for the economic disaster certainly had the motive to point the historical finger away from himself, but some economists and historians hold with Hoover's cess that Earth War I was the foremost of several causes of the Keen Low.

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"In that location can be picayune doubtfulness that the deepest roots of the crisis lay in the several chronic infirmities that World State of war I had inflicted on the international political and economic social club," wrote historian David 1000. Kennedy. "The war exacted a savage economic and human toll from the core societies of the avant-garde industrialized world, including conspicuously Britain, French republic and Frg."

"Globe War I and its aftermath is the nighttime shadow that hangs over the entire menses leading up to the Bully Depression," says Maury Klein, professor emeritus of history at the University of Rhode Isle and author of Rainbow's End: The Crash of 1929. "Selection whatsoever policy you desire, and you can run into how it leads dorsum to World War I."

America Retreats From the World

While the Us emerged from Globe State of war I not only as the globe'due south leading economic power, merely scarred by its involvement in what many Americans saw as a purely European disharmonize. The disillusionment with World War I led to a retreat from international affairs.

"America was going to make the earth safe for democracy and came out disgusted with the whole matter," Klein says. "The United states of america emerged as the logical leader on the globe phase and then cut out of that role."

Non wanting to be saddled with the cost of a European war, the U.s.a. demanded that the Allies repay money loaned to them during the disharmonize. "The Allies took the position that if they had to practice that, so they would have to collect reparations from Deutschland that could be used to repay the war loans," Klein says.

German Reparations Weigh Down Europe

Council of Four at the WWI Paris peace conference, May 27, 1919 (Fifty - R) Great britain Prime Minister David Lloyd George, Italian Premier Vittorio Orlando, French Premier Georges Clemenceau, U.South. President Woodrow Wilson. The treaty signed at the conference saddled Germany with billions of dollars in reparations.

As a outcome, the punitive Treaty of Versailles required Federal republic of germany to pay billions of dollars in reparations to Cracking Britain, France, Belgium and other Allies. "The Peace is outrageous and impossible and can bring nothing just misfortune," wrote economist John Maynard Keynes after resigning in protestation as the British Treasury Department's chief representative to the peace conference. In his international bestseller The Economic Consequences of the Peace, Keynes argued that the onerous reparations would only further impoverish Germany and exacerbate the harm caused to the European economy by the war.

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What ensued was a cruel menstruation of money back and forth across the Atlantic as American bankers lent coin to Germany to pay reparations to the Allies to repay their debts to the United States. With the Allies refusing to ease reparation terms, Germany defaulted on its payments in 1923, and its economy further crumbled when factories shuttered subsequently French republic and Belgium occupied the industrial Ruhr region to forcefulness German language repayment.

To come up with the money to run into its obligations, Germany accelerated its currency printing, which caused such hyperinflation that the German language mark became near worthless. The substitution charge per unit of the German marking to the American dollar plummeted from 32.9 to 1 in 1919 to 433 billion to 1 past 1924. The paper on which High german marks were printed had more value as kindling or children's building blocks than as currency.

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Economic Barriers Restrict Merchandise

While the crippled European economy whimpered, the American economic system roared through the Twenties. However, Klein says social changes to the United States as a result of Globe War I laid the groundwork for the ensuing economic freefall.

"Due to the role they played during the war, businessmen emerged as knights in shining armor," Klein says, "and the business of the land is business." Policies enacted by successive Republican administrations resulted in both large tax cuts for large business owners that widened income inequality and a lack of regulation on banks and Wall Street that some historians connect to the outset of the Not bad Depression.

At the same time, the United States continued its inward turn past curtailing immigration and in 1922 enacting the highest tariff in the state'south history to that betoken. While global guns remained silent during the 1920s, an international trade war raged around the globe that hindered economic recovery.

Past the time of the October 1929 Stock Market place Crash, countries such as Germany, United kingdom of great britain and northern ireland, Canada and Nippon had already fallen into recession. When American credit dried upward and banks started to fail, lenders not only stopped lending to Germany, they sought prompt repayment. The added economic pressure only worsened the downturn.

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The Global Economy Collapses

Klein says the Great Depression did non accept hold until the fall of 1930, and in the interim Hoover signed into law the Smoot-Hawley Tariff Deed, which erected the highest trade barriers in American history. "At the very fourth dimension you demand to stimulate spending, these policies put in identify a tariff that raised the price of goods and made it more difficult for Europeans to pay their bills and sell their goods in this country," Klein says.

Every bit another protectionist wave swept across the globe, Germany appear the formation of a customs matrimony with Republic of austria in March 1931. France feared it a step toward annexation and withdrew funds from Austrian banks, igniting a banking panic in Vienna that spread to Germany. In the ensuing months, the European economic system imploded.

The inward turn subsequently World War I had now left the United States to confront the Great Depression on its ain.

"We are now faced with the trouble, non of saving Deutschland or Britain," Hoover told congressional leaders in tardily 1931, "but of saving ourselves."

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Source: https://www.history.com/news/world-war-i-cause-great-depression