Japan During The Great Depression Essay

In October 1929, after a period of stock market boom in the US, share prices at Wall Street, US Stock Exchange, fell dramatically due to over-speculation followed by panic selling which resulted in a loss of large amounts of money for the investors. During the boom period, everyone had invested in stocks leaving out little money for lending and circulating in the market thus resulting in a stock market crash. This collapse was known as the Wall Street Crash and marked the outbreak of the Great Depression in the USA that soon had a spillover effect in many other countries as a result of the US terminating its loans to them. The Great Depression was a global economic event characterized by inflation, high unemployment, industrial decline in production and trade and poverty.
There was a banking crisis in early 1927 following the 1923 Tokyo earthquake, which led to the bankruptcy of many small and medium-sized banks, which consequently resulted in the concentration of financial control in the hands of the bigger banks. Similarly, small industries were outcompeted by the larger ones. As a response to these crises, Prime Minister Tanaka increased military spending to intensify economic exploitation of Japan’s colonies. These measures had little effect in solving Japan’s domestic economic problems. The Great Depression that had a disastrous impact on Japan’s economy aggravated the situation during the period 1929-1937. 1930-1931, Japan was plunged in the Showa Depression that was characterized by deflation and economic decline. The period from 1932 to 1936 was marked by economic recovery under Takahashi characterized by growth and moderate