International factors had a big part in causing the Great Depression in the U.S. Let's look at some important reasons why this happened:
Aftermath of World War I: After WWI, many European countries were in a lot of debt, especially to the U.S. The U.S. had lent money to countries like France and Britain. When these countries had trouble paying back the loans, it created money problems that came back to the U.S.
Drop in Global Trade: In the late 1920s, international trade started to drop sharply. Countries began to raise tariffs, which are taxes on imports, to protect their own economies. This led to a huge 65% drop in U.S. exports from 1929 to 1932. The Smoot-Hawley Tariff of 1930 made things worse by adding high taxes on imported goods.
The Gold Standard: Many countries were still using the gold standard. This meant they couldn't easily create more money when the economy was bad. As a result, prices fell, and people stopped buying as much, making things even tougher for the U.S. economy.
These international issues, combined with problems at home, created a perfect storm. This made the Great Depression even worse and affected millions of Americans.
International factors had a big part in causing the Great Depression in the U.S. Let's look at some important reasons why this happened:
Aftermath of World War I: After WWI, many European countries were in a lot of debt, especially to the U.S. The U.S. had lent money to countries like France and Britain. When these countries had trouble paying back the loans, it created money problems that came back to the U.S.
Drop in Global Trade: In the late 1920s, international trade started to drop sharply. Countries began to raise tariffs, which are taxes on imports, to protect their own economies. This led to a huge 65% drop in U.S. exports from 1929 to 1932. The Smoot-Hawley Tariff of 1930 made things worse by adding high taxes on imported goods.
The Gold Standard: Many countries were still using the gold standard. This meant they couldn't easily create more money when the economy was bad. As a result, prices fell, and people stopped buying as much, making things even tougher for the U.S. economy.
These international issues, combined with problems at home, created a perfect storm. This made the Great Depression even worse and affected millions of Americans.