The Impact of the Depression on the League of Nations (AQA GCSE History)

How damaging was the Great Depression on the League of Nations? - Summary

The Great Depression of the 1930s damaged the League of Nations and its ability to maintain peace and stability. The economic crisis caused widespread unemployment and poverty. This made it difficult for many countries to focus on the League’s humanitarian work. The League's commissions, such as those addressing health, labour and refugee issues, struggled to secure the necessary funding. This limited the impact that these organisations had.

The Great Depression also contributed to the rise of militarism and extremism. As people faced severe poverty, they became more susceptible to extreme political movements that promised quick solutions. In Germany, for example, the economic crisis helped the Nazi Party gain support by promising to restore prosperity and national pride. Similarly, in Japan, economic difficulties led to increased militarism, with leaders looking to expand their territory to secure resources. These aggressive policies and actions challenged the League's ability to keep peace. Many countries were more focused on their national interests than on international cooperation.

However, the League of Nations faced significant challenges before the Great Depression. The League had already shown weaknesses in dealing with conflicts like the Corfu incident in 1923, where it struggled to enforce its decisions against powerful countries like Italy. There also were fundamental issues with the League’s members and structure. The Great Depression only made the problems with the League worse. 

The Wall Street Crash

• Throughout the 1920s, the USA experienced a boom in their economy

  • Britain and France were repaying their wartime loans to the USA

  • As a result, the USA had a surplus of money in their economy

• The USA’s economy was growing at such a rapid rate that, by October 1929, stockbrokers began to speculate that the market would decline

  • Americans from all areas of society had bought shares in the 1920s. Working-class Americans could not afford for their share prices to drop too far

  • Share prices began to fall

  • Shareholders rushed to sell their shares before their value dropped too significantly

• Between 24th and 30th October 1929, the USA’s economy collapsed

  • The worst day was ‘Black Thursday’

    • People sold 13 million shares

    • Prices plummeted due to the amount of shares available

  • Shares that were worth $20,000 on the morning of 24th October 1929 were worth $1,000 by the end of the day

  • By 30th October 1929, investors had lost $4 billion

• This event is called the ‘Wall Street Crash’ 

  • Wall Street is where the Stock Exchange is based in New York

Impact of the Depression

• The Wall Street Crash caused a worldwide depression in the 1930s because:

  • The Dawes Plan and Young Plan connected the US economy to European countries

    • To save their economy, the US recalled all of their loans

    • Germany’s economy could not cope without US intervention

  • Trade between countries slowed

    • Leaders encouraged their populations to buy domestic products to boost employment

    • Governments increased trade tariffs for foreign products

    • Reduced trade caused more damage to worldwide economies 

Extremism & militarism

• Due to economic issues, many people began to turn against their governments

Why did extremism increase in the 1930s?

• People blamed their governments for the economic crash

• Extremist parties offered alternatives to government policies during the Great Depression

  • The Nazi Party promised to reverse the Treaty of Versailles and make Germany strong again

• A rise in dictatorships

  • By 1939, there were four key dictators in Europe:

    • Mussolini (Italy, 1922)

    • Stalin (USSR, 1924)

    • Hitler (Germany, dictator by 1934)

    • Franco (Spain, 1939)

  • Some populations believed a strong, autocratic leader could rebuild the economy better than a democratic government

Why was extremism an issue for the League of Nations in the 1930s?

• Extremism is holding radical political opinions compared to the views of most people

• Extremist parties promised their citizens solutions to their problems

• Extremist leaders only cared about their own country

  • Fascism and communism are opposite opinions

    • Fascist and communist dictators are less likely to work together

  • To prioritise their country, extremists adopted an aggressive foreign policy

    • They had no respect or interest in the League of Nations

• Non-extremist leaders began to ignore their duties to the League of Nations

  • They prioritised protecting their people from the threats of communism and fascism

  • They wanted to strengthen their country through nationalism

A solution to the Great Depression - Militarism

• Militarism is the belief that a country must have strong armed forces

• Militarism distracted countries from the Depression because:

  • It created employment in the rearmament businesses

  • It made civilians feel proud of their country again

Why was militarism an issue for the League of Nations in the 1930s?

• Militarism went against the League’s core aim of disarmament

• The League would have to stop aggressive actions from countries who:

  • Threatened others using their large armed forces

  • Invaded countries to expand empires

  • Started wars

• The League lacked the USA’s military force

  • France and Britain were unwilling to spend money to stop international aggression

    • They were still recovering from the Great Depression

  • Countries knew that the League was weak in the 1930s

    • A strong military would scare the League to rule in the country’s favour