2.1   The Great Depression

. The Great Depression Developments in the post-World War I The First World War led to the expansion of certain industries in the hope that the war-time boom would continue. However, when the War came to an end, the industries that grew to meet war-time requirements had to be abandoned or modified. The situation was made worse by the political complications caused by the Treaty of Versailles. A new wave of economic nationalism which expressed itself in protectionism or in tariff barriers affected world trade. The war also placed a heavy burden of debt on every European country. Stock Market Crash in the US The first huge crash occurred on October . This discouraged investors and consumers to such an extent that more and more people began to sell their shares and dispose of their stocks. But there were no buyers. This was followed by the failure of American banks. The American financiers were forced to withdraw their own funds invested abroad.