Christmas The Global Reach of the Great Depression
Jeremy: Uh, if we look at the political side of things, only Japan and the United States of America came out of World War I better than they were before.
Jeremy: Uh, and this is largely because Japan and the USA were the ones who, by all accounts, paid for the war.
Jeremy: European countries went bankrupt quick. And when they went bankrupt, they needed money to keep their economies flowing, so they borrowed, and they borrowed heavily from Japan and the United States.
Jeremy: And this is what kept European countries going during the war, and after.
Jeremy: This got even worse after World War I. The countries of Europe went bankrupt.
Jeremy: Um, they had suffered huge population losses and in order to get their countries back on track, they had to borrow, and they borrowed from the United States J- and Japan.
Jeremy: Germany: things were bad. Pay for the war, Germany had just started printing money. They couldn’t get loans from the United States and Japan because they weren’t allied. And this caused severe inflation.
Jeremy: Uh, and this continued after the war, largely a result of the reparations payments that Germany was forced to pay to France and Belgium as a result of the war.
Jeremy: As a result of all these loans, by the late 1920s, the world’s economy depended on the U.S. economy.
Jeremy: Unfortunately for the world, the U.S. economy crashed, in what is known as the Great Depression.
Jeremy: Stocks that people had brought on margin were worthless. Companies began laying off workers. Profits declined. Factories shut down. The economy was collapsing.
Jeremy: Now, in an effort to improve the U. S. economy, as a result of the Great Depression, USA imposed tariffs on foreign goods.
Jeremy: They say if you’re gonna- if- if you’re gonna bring Volkswagens from Germany, we’re going to put a special tax on that because it’s not made in America.
Jeremy: Problem with tariffs is that other countries do it too. So, U.S. starts putting tariffs on foreign goods. Foreign countries start putting tariffs on American goods. World trade drops some 65% in just a couple of years.
Jeremy: Based around U.S. demand, economies around the world fell. People in the United States don’t have the money to buy things anymore, so they’re not buying things from other countries or the United States.
Jeremy: So now other countries’ factories are shutting down.
Jeremy: Finally, Britain and France enacted tough reforms. For example, they raised taxes on the rich.
Jeremy: Germany, Austria, and Italy were not as fortunate. They were not able to raise taxes on the rich. U.S. does not raise taxes on the rich. The depression gets worse.
Jeremy: And Italy and Germany, uh, unable … fir- first off, they have very young democracies that are not- that are not experienced in dealing with crisis.
Jeremy: So, while in Great Britain and France, they enact reforms, like they increased taxes, Germany and I- and Italy are not capable of this, and instead they have this thing called fascism show up.
Jeremy: Uh, the first fascist party forms in Italy as a result of inflation, unemployment.
Jeremy: Uh, and Germany, kind of sort of similar. Adolf Hitler. Um, after the Great Depressio- Depression strikes in Germany, Germans turn to Hitler for security. He is formally appointed Chancellor of Germany in 1933.
Vocabulary:
came out of – to finish or exit a situation in a certain condition, “The team came out of the game as the winners.”
by all accounts – according to what everyone says, “The new restaurant is, by all accounts, the best in town.”
borrowed heavily – took a very large amount of money from a bank or person with a promise to pay it back, “They borrowed heavily to buy their first house.”
back on track – returning to the right path or a good, normal situation, “After being sick, he is finally back on track with his studies.”
printing money – when a government makes more paper cash, which often lowers the value of the money, “The country tried to fix its debt by printing money, but prices just went up.”
laying off – stopping a worker’s employment because there is not enough work or money, “The car factory is laying off fifty workers this month.”
in an effort to – trying to do something or making an attempt to reach a goal, “She woke up early in an effort to finish her homework before school.”
imposed tariffs on – put a special tax on goods coming from other countries, “The government imposed tariffs on foreign fruit to help local farmers.”
turn to – to go to someone for help, advice, or safety, “When you have a problem, you can always turn to your friends.”