The initial responses of most European governments to the widening economic difficulties were quite similar to the approach initially advocated by Herbert Hoover the reduction of government spending and implementation of new tax programs. American policies that minimized governmental unemployment relief were of no help, and the Smoot-Hawley Tariff created obstacles to international trade at a time when the world needed it most.
In May 1931, the Austrian Credit-Anstalt failed, which touched off panics in neighboring countries. International efforts to curb the chaos failed.
In September, the Bank of England deserted the gold standard, which caused problems with the currencies that were tied to the pound sterling. Those nations were forced to devalue the currencies and international trade slowed markedly.
The situation in Germany was especially precarious. The nation had labored under the heavy burden of reparations payments imposed by the Allied victors at the end of World War I. In order to meet those obligations, Germany had resorted to borrowing and had incurred indebtedness to both the U.S. government and private American lenders.
By 1932, it was estimated that nearly 40 percent of the work force was unemployed. Adolf Hitler made inroads among the discontented, cast blame on the Communists and Jews as the root of German problems, and came to power as chancellor in January 1933.
Great Britain was in a far better position to fend off the worst miseries of the Depression. Widespread unemployment in the 1920s had conditioned the government to formulate responses and the British had in place programs for the relief and welfare of those most adversely affected.
In France, the economic dislocation took longer to be felt because of the nation`s lagging industrial position. Heavy losses in World War I had depleted the work force and its industrial base compared unfavorably with Britain, Germany, and the U.S.
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The Forgotten Man: A New History of the Great Depression by Amity Shlaes.
In The Forgotten Man, Amity Shlaes, one of the nation's most-respected economic commentators, offers a striking reinterpretation of the Great Depressi...