Following the conclusion to the bloody and all-around destructive fight known by historians today as either the Great War or World War I, a four-year struggle fought among both the major powers of Europe as well as the United States over diplomatic treaties secured among various nations at the turn of the century and imperialistic territory disputes. When the war concluded, the nations throughout the entire continent suffered a universal shrinkage of each national economy, as prior demands consisting of goods required to supply troops and war supporters no longer existed. The former momentum of the wartime effort was now lost and no longer able to continue to fuel the economy forward. Almost all of the of the major states of Europe also shared the burden of possessing large quantities of war debts to sponsors like the United States, and states like Germany who had lost the fight were forced to pay forward the harsh reparations of $31.5 billion described in the Treaty of Versailles to the allies for believing to have started the war with its aggressive imperialistic policies and malignant alliances. However, since practically all countries of Europe following the Great War and into the 1920s did not hold much money in any of their economies, so a circle of debt had become created, leading to events like the hyperinflation of the German currency in early 1924 as an attempt to pay back the allied forces. The economic outlook in Europe appeared bleak, that was until the creation of the Dawes Plan.
The Dawes Plan was a proposed economic plan set forth in 1924 by American financier Charles Dawes to assist Europe and particularly Germany's hardships after the war. Dawes' plan consisted of the American economy, largely remaining unscathed from the entire war effort as they entered at the very end, to pay out Germany's debts and prevent further instances of hyperinflation and an uncontrolled currency in the new Weimar Republic. With time, Germany was steadily improving from being at one point on the verge of collapse to gaining a steadier financial footing in the international world. Despite the continual schisms and wounds instilled within the European continent from this previous and destructive war, the circle of debt had begun to be fulfilled, and the allies received their rightful payments by the decree of the Treaty of Versailles. The loose ends of the Great War are now finally being resolved. At this point, the financial situation around the world appears to be in a healthy location, the is until the American stock market crash in 1929.
When the infamous stock market crash of 1929 hit Wall Street, the financial capital of the nation, the once pristine bubble of hope and optimism that characterized and lifted the rich culture of the 1920s decade had popped, causing America to plunge into the depths of the Great Depression. It may appear odd to think that the American Great Depression has the potential of correlating with the economic sorrows of Europe, but in reality, historians have witnessed a direct relationship between the two entities. Following the war, America had been one of the largest trading partners with many of the European nations and continued to support the financial needs of these multiple powers for extended periods of time, proving itself to be an integral factor contributing to the overall welfare of the continent as a whole. When the economic crash occurred in 1929, the powerful United States was no longer able to manage supporting the other European people, and the hopes of Europeans in improving their overall economic statuses were crushed and halted for another decade. In sum, the Great Depression spread over through diplomatic ties to foreign relations, and America's diplomatic ties allowed for the Great Depression to become associated all around the world and have its flames of economic sorrow spread across oceans and continents. This is one reason for why the Great Depression is heavily emphasized not only in United States history but also in world and European history as well.
Resources:
http://www.historylearningsite.co.uk/modern-world-history-1918-to-1980/weimar-germany/the-dawes-plan-of-1924/
https://www.britannica.com/event/Dawes-Plan
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