During the war Europe was not only forced to liquidate their U.S. investments, but to take on debt as well. ... Also, nations could hold part of their reserve in foreign currency, since gold supply was limited. ... A third weakness was each country's ability to hold part of their reserve in foreign currency. ... They no longer saw assured profit and investment began to decline. ...
Almost all nations sought to protect their domestic production by imposing tariffs, raising existing ones, and setting quotas on foreign imports. ... In 1930, congress passed this act to protect farmers and manufacturers from foreign competition. ... Consider some of the other similarities: It is becoming apparent that a lot of what was happening in the investment business was unethical and illegal, just as was discovered after the crash of 1929. ... Many countries are in or near default with respect to foreign loans (it was a banking crisis that began in England that really sparked the be...
Instead the banks started making large loans to foreign countries that were in debt. ... As the US began to cutback in production and also cutback in their purchases of raw materials and supplies from foreign countries, as a result many European economies collapsed. After the American Economy weakened foreign countries found it a lot more difficult to borrow money from the US. ... Construction fell 78 percent, private investment fell 88 percent and farm income which was already low to begin with was cut in half. ...
(McElvaine57) In the Collidge administration money and credit were available to industries for investment thanks to pressure on the Federal Reserve Board to keep the discount rate low. ... That caused 1.2 billion dollars of lost foreign sales between 1929 and 1933. ...
