How did the Great Depression in the U. S. affect other nations around the world?

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Eric Sharp

History

21 October, 11:02

How did the Great Depression in the U. S. affect other nations around the world?

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Romeo Zuniga · Answer 1

The Depression became a global phenomenon because of trade connections and the United States pulling back from financial involvements elsewhere in the world. American banks stopped investing, and demanded repayment of loans.

A key example would be the case of Germany. After the Great War (World War I), Germany was required to pay heavy reparations payments to Britain and France. Meanwhile, Britain and France owed repayment of funds to the United States for borrowing they had done during the war. So the United States had been supporting Germany in the 1920s with loans. When the USA could no longer afford to extend loan monies to Germany after the market crash of 1929, that sent Germany's economy spiraling even deeper into the Depression than was felt in the United States.