The Great Depression

World War I created an unstable economy for the world, Great Britain was the world's creditor and after the war America assumed that role. 1914 through 1918 America gave loans to our allied nations, which totaled at $11 billion, and with foreign investments the $11 billion became $15.7 billion. Our government did not want to forgive loans that our allies owed us for the war they so that had to refinance the existing loans which caused debts to pile on top of another. A third of the $15.7 billion would end up going to Europe, in forms of loans many of those loans would end up in Germany. Since we gave Germany those loans, they were not able to make reparation payments to our allies as agreed in the Treaty of Versailles. If our allies did not receive reparation payments from Germany, the allies would not be able to pay America back the billions of dollars they borrowed. The result of this stunted our economy while Europe's economy grew and became more industrialized therefore not needing much of American goods anymore which in turn limited our exporting revenues. When the market crashed, it depleting almost all of our capital, which made us unable to, invests in foreign investments. The result of this made it very difficult for the European consumers to purchase American goods, which in return weakened U.S. trade Due to the problem we were facing with international trade up came the Smoot Tariff Act of 1930 which was to prevent foreign goods from undercutting American goods on the market, they would charge international goods high taxes so it would be to costly to compete with American goods. Europe's market not quite stable yet and the high taxes on European goods eliminated America out of its market. Europe lost the American market and soon Europe's economy would collapse and the depression would soon be worldwide. .
             The depression would hit America like the black plague. There has never been such a recession like this in history.