Skool

In 1929, USA saw the most dramatic economic crash that had ever been felt by anyone then. This is also now known as the Wall Street Crash.

This economic depression occurred because USA was simply producing more than they could buy. This meant that all the shops were full and nobody was buying the products in the shops. You can see this sometimes in Malaysia where some of the shops do not sell all their stuff.

In an attempt to try to stop the mess going further, American factories stopped employing people. This was because they wanted to save their money. They thought that this would stop the economic crash. Unfortunately, not employing people meant that even more people lost their jobs, and the situation worsened.

Because the American economy suddenly crashed, several people lost their jobs. This resulted in people committing suicide, and a huge depression. People literally went from riches to rags. For Americans, this was crisis at its worst.

The depression was not only bad new for the Americans, but also bad for several other countries as well. Britain, France, Italy, Germany, Japan, and others - were brought to their knees because of everyone's hugely strong trade links with America. Are listening The conservative U.S. government, then led by President Herbert Hoover, refused to provide any direct relief to the people. Britain and France took out their economic woes on Germany and demanded payment of crazily large World War I reparations. Germany was hit the hardest, as its economy had already experienced the devastating effects of hyperinflation (when a currencies value goes down) before the U.S. stock market crashed in 1929. The German economy was saved from complete collapse - only temporarily - by the United States' offer of the 1924 Dawes Plan to reschedule reparation payments. Even with the aid, the emerging German leader, Adolf Hitler, could only make vague promises to strengthen and revitalize the country's failing economy.

Japan, however, was the first to recover from the mess. It decided that the only way it was going to get raw materials was to invade east china. They did this with ease, and became the first to recover, as they did not need America to produce their goods for them - they now had east china.