Great Depression
1929-1932



Recovery from the Great Depression, 1933-1939



There were many different ways the individual countries dealt with the economic crisis.

Fascist Italy and the democratic Netherlands had, already before the Wall Street Crash and the ensuing Great Depression, engaged in large-scale state run development projects. Beginning in 1933, many governments, democratic as well as autocratic and faschist, engaged in such a policy; highways were built, hydroelectric dams erected, swamps drained etc., and by this means unemployment reduced as well as the ailing economy stimulated - the former unemployed now had money to spend; the industry had to supply the state-financed projects with construction materials and equipment etc.

Yet there were significant differences. BRITAIN and the NETHERLANDS continued their policy of keeping the money supply limited, in order to preserve the value of their respectice currency - continued austerity. Unemployment was reduced, but continued to be on a high level.
In SWEDEN a social democratic government was now in charge, laying the foundation for the Swedish WELFARE STATE. Many hydroelectric power stations were established.
In the US, President F.D. Roosevelt announced his NEW DEAL, a plan reducing unemployment considerably and preparing the ground for an economic recovery.
In GERMANY the government invested heavily in both state-run infrastructure projects (Autobahn) as well as in rearmament; it was financed by having the Reichsbank print money. This financially irresponsible policy had to lead to an economic crash; German experts expected it to happen in 1940; Hitler was determined to have begun a war by then.
ITALY was an exception, as Mussolini had introduced state-run programs to improve the infrastructure and cultivate land already in the 1920es. The economy lingered on, until in 1935 new problems arose - following Italy's invasion of Ethiopia, the League of Nations declared ECONOMIC SANCTIONS against Italy. The country found itself in a situation worse than before.
In FRANCE and SPAIN, Popular Front governments were formed, both short-lived. In France the government failed and was democratically replaced, in Spain it was ousted in a 3-year-long CIVIL WAR. Political instability delayed economic recovery.


Economic Recovery from the Great Depression, by Country

Britain Netherlands Germany France Italy Sweden




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This page is part of World History at KMLA
Last revised on February 16th 2002

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