Question
Compare and contrast the causes of the Great Depression in two countries in the Americas.
▶️Answer/Explanation
Ans:
Candidates are required to demonstrate a clear understanding of the similarities and differences in the causes of the Great Depression in two countries in the region.
Indicative content
• Any countries in the Americas are acceptable. Likely choices could be the United States, Canada, Argentina and Brazil.
• Some common similarities could be decline in agricultural prices, uneven prosperity, stagnant industrial wages, and decreased international trade.
• Some differences might be the stock market crash in the US, but not in other countries, though the effect was felt as business constricted.
• Other differences could be levels of foreign debt, disparity between industrial and agricultural production, specific crops, such as coffee in Brazil and wheat in the US, Canada and Argentina, experiencing price decline, and the economic decisions of political regimes, parties and leaders.
• Similarities and differences will vary depending on the countries chosen, but expect specific knowledge for each country.
The above material is an indication of what candidates may elect to write about in their responses. However, it is not exhaustive and no set answer is required.
Examiners and moderators are reminded of the need to apply the markbands that provide the “best fit” to the responses given by candidates and to award credit wherever it is possible to do so.
Question
“The Great Depression of 1929 presented Latin America with opportunities as well as problems.” Discuss.
▶️Answer/Explanation
Ans:
In their responses, candidates are required to offer a considered and balanced review of the impact of the Great Depression in Latin American countries. They could argue that, while it posed some serious problems, it became a chance to develop their national economies. The impact of the Depression on social and political aspects could also be relevant.
Indicative content
• The financial sector in Latin American countries suffered as access to foreign loans was almost non-existent; however, smaller national banks linked to production sectors developed to provide financial assistance (for example agrarian and industrial banks).
• Countries defaulted their foreign debt; in the longer term, the available capital was then used to develop national economies.
• Rise in unemployment and poverty levels could be considered.
• The fall in exports as well as the prices of Latin American primary products was dramatic for some countries (for example Cuba or Chile) but opportunities to promote and develop national industries developed.
• The emergence of more centralized government institutions and centrally planned economies to deal with the issues sometimes translated into effective solutions. However, greater bureaucracy and government interference could be seen as harmful.
• Some governments were politically weakened by the Depression and this contributed to the rise of military regimes.
• The rise of leftist movements and organizations demanding, among other changes, agrarian reform and greater political participation could be argued as an opportunity or a problem.
The above material is an indication of what candidates may elect to write about in their responses. However, it is not exhaustive and no set answer is required.
Examiners and moderators are reminded of the need to apply the markbands that provide the “best fit” to the responses given by candidates and to award credit wherever it is possible to do so.
Question
Discuss the nature and effectiveness of the response to the Great Depression of either Hoover or R B Bennett.
▶️Answer/Explanation
Ans:
Candidates must offer a considered and balanced review of the response of one of the leaders to the Great Depression. There must be coverage of both aspects of the question; “nature” and “effectiveness”.
Indicative content
Hoover (March 1929 to March 1933):
• Hoover took the view that public relief should originate from state and local, rather than national, government. He advocated voluntary measures (businesses to avoid cutting wages and unions to not strike). In spite of some compliance, the depression worsened.
• In June of 1930, Hoover approved the Smoot-Hawley Tariff Act as a means to protect US businesses from foreign competition. US trade partners responded with equally severe rate increases and the world economy sank further into depression.
• By 1931, Hoover accepted that some federal intervention was necessary. He supported expansion of the Federal Farm Board (established in 1929) to help stabilize prices by holding back surplus grain and cotton from the market. The program proved inadequate due to limited funding, while overproduction of farm goods continued.
• Early in 1932, Hoover supported the Reconstruction Finance Corporation, a government-owned corporation to prop up banks, railroads and other key businesses. He believed the stabilization of these entities would have a “trickle-down” effect and support recovery. However, the depression reached its most severe stage in late 1932, leading to Franklin Roosevelt’s landslide victory.
R B Bennett (1930 to 1935):
• Bennett’s legal and business background led to a largely laissez-faire response to the depression. He helped to achieve the Imperial Preference Policy agreement to reduce tariffs among the members of the British Empire to boost sales of Canadian products. There was little positive impact.
• Bennett’s administration feared the concentration of unemployed single men within urban areas and established relief camps in remote regions. The separation of families, militaristic management, poor food and housing conditions, and a 20 cent per day wage brought little relief and much criticism. Conditions led to the “On to Ottawa” movement.
• In January 1935, Bennett reversed his position, calling for government “control and regulation” of the economy. Specific initiatives included progressive taxation, unemployment and health insurance, along with minimum wage and maximum hour laws. Public perception varied between opinion that the reforms were, “too little and too late” to others that thought they went too far. There was little improvement in unemployment rates or gross national product (GNP).
The above material is an indication of what candidates may elect to write about in their responses. However, it is not exhaustive and no set answer is required.
Examiners and moderators are reminded of the need to apply the markbands that provide the “best fit” to the responses given by candidates and to award credit wherever it is possible to do so.
Question
With reference to one country in Latin America, examine the response of the government to the Great Depression.
▶️Answer/Explanation
Ans:
Candidates must demonstrate a clear understanding whether government policies enabled the selected country to mitigate the effects of the Depression.
Indicative content
• Exports decreased significantly in all countries in the region, causing internal migration and a rise in unemployment in urban centres. Governments implemented some measures of social aid for the unemployed.
• Some governments, for example in Argentina and Brazil, adopted more centrally planned economies that included protectionist policies to promote the substitution of imports and the development of national industries.
• The adoption of import substitution policies (ISI) allowed government to improve their trade balance. In Chile, for example the impact of the Depression on the more traditional economic activities allowed for the successful development of new industries such as textiles and chemicals.
• Most governments abandoned the gold standard. The impact of this policy was a rise in inflation levels and a negative impact in the living conditions. Some countries, for example Argentina, adopted authoritarian governments, which limited the social unrest.
• Some governments increased public spending and bureaucracy to curb unemployment. Mexico, for example, promoted the expansion of its infrastructure.
• Some governments, for example in Bolivia, Colombia and Chile, defaulted their foreign debt. Consequently, they experienced difficulties finding access to foreign capital. However, they were able to reinvest the funds that would have been used to pay the foreign debt and interest on that debt, and to develop their national economies (something they would have found difficult to do in a different context).
The above material is an indication of what candidates may elect to write about in their responses. However, it is not exhaustive and no set answer is required.
Examiners and moderators are reminded of the need to apply the markbands that provide the “best fit” to the responses given by candidates and to award credit wherever it is possible to do so.