THE MAKING OF A NATION - The Great Depression: How the Economic Crisis at Home Affected Relations OverseasBy David Jarmul

Broadcast: Thursday, August 10, 2006

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THE MAKING OF A NATION -- a program in Special English by the Voice of America.

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The stock market crash of nineteen twenty-nine began a long and difficult period for the United States. President Herbert Hoover struggled to find solutions as the nation sank into the worst economic crisis in its history.


Herbert Hoover

But the Great Depression was not the only problem demanding answers from Hoover. The president also had to deal with a number of important foreign policy issues. There were revolutions in South America. The economic situation created serious problems in America's relations with Europe. And Japan launched a campaign of aggression in northeastern China.

Hoover failed in his efforts to solve America's economic troubles. But as we will see in our program today, he did succeed with some of his foreign policies. He and most other Americans, however, would fail to understand the long-term importance of the forces gaining control in Germany and Japan.

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Herbert Hoover's foreign policies were marked by his desire to make friends and avoid war.

Like most Americans, the new president had been shocked by World War One. Hoover had seen the results of that terrible war with his own eyes. He led the international effort to feed the many European civilian victims of the fighting. And the new president was a member of the Quaker religious group that traditionally opposes armed conflict.

Hoover shared the wish of most Americans that the world would never again fight a major war. He felt the bloody bodies at Verdun, the Marne, and the other battlefields of World War One showed that conflict should be settled by peaceful negotiations.

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Hoover worked toward this goal even before he entered the White House.

Following his election, he had several months free before becoming president. Hoover used this period to travel to Latin America for ten weeks. He wanted to show Latin American nations that they could trust the United States to honor their rights as independent nations.

Hoover kept his word. The year after he took office, his administration announced that it would recognize the governments of all Latin American countries, including governments that the United States did not like.


Theodore Roosevelt

Hoover told the nation that he would not follow the Latin American policies of President Theodore Roosevelt.

Roosevelt had decided in nineteen-oh-four that the United States had a right to intervene in Latin America if governments there did not act in the right way. Hoover said this was wrong. He told the country that it was more important to use friendship instead of force.

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Hoover withdrew American forces from Nicaragua. He arranged to withdraw them from Haiti. And he showed restraint as some fifty revolutions shook the nations of Latin America. Some revolutionary governments opposed the United States. They refused to pay debts to American companies or claimed ownership of foreign property. But Hoover refused to advance American interests by force. He wanted to prove that the United States could act towards Latin American nations as equals.

The policy was quite successful. And relations between the United States and Latin American countries generally improved under Hoover's leadership.

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The situation in Europe was much more difficult and serious for the United States. The problem was simple: money. The Great Depression did not stop at America's borders. It moved to Britain, Europe, and beyond. And it brought extremely hard economic conditions.

In Germany, the value of the national currency -- the mark -- collapsed. German people were forced to buy goods with hundreds, thousands, and millions of marks. They lost faith in the existing system. And they looked for some new leader to provide solutions.

The economic crisis also put great pressure on the international circle of debt that had been created after the war. Suddenly, American bankers could no longer make loans to Germany. This meant that Germany could not pay back war debts to France and the other Allied nations of World War One. And without this money, the Allied nations could not repay money they owed American banks.

The circle of debt fell apart.

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The situation grew steadily worse throughout the early months of nineteen thirty. Hoover finally had to announce that all nations could delay their debt payments to the United States for one year.

Hoover's action did what he wanted it to. It put a temporary stop to the international debt crisis. But it caused great damage to private banks. People lost faith in banks. Throughout Europe, people withdrew their money from banks. As a result, the European banks could not repay more than a thousand million dollars they had borrowed from private American banks.

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This was not the only problem. Nations throughout Europe also were forced to take their currencies off the gold standard. This meant their money no longer could be exchanged for gold. The economic situation grew worse. And as it did, serious political tensions began to threaten peace in Asia and Europe.

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The threat in Asia became clear first.

Japan had defeated Russia in a war in nineteen-oh-five. The victory gave Japan control over the economy of southern Manchuria in the northeastern part of China. As years passed, Japan began to feel threatened by two forces. First, Chinese leader Chiang Kai-shek was trying to organize all of China under the control of his Nationalist forces. Second, Russia was extending the Chinese eastern railway to the Siberian city of Vladivostok.

Japan's army took control of the government in Tokyo in late nineteen thirty-one. The army was fearful of the growing threat to Japan's control of Manchuria. So it moved Japanese troops immediately into several Manchurian cities. And it claimed political control of the whole area.

President Hoover and most Americans opposed Japan's aggression strongly. But they were not willing to take any action that might lead to another major war.

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Japan's military leaders knew that the people of Europe and America had no desire to fight to protect China. And so their army marched on. It invaded the huge city of Shanghai, killing thousands of civilians. Western leaders condemned the action. American Secretary of State Henry Stimson said the United States would not recognize Japanese control in these areas of China.

But again, Hoover refused to consider any economic actions against the Japanese. And he strongly opposed taking any military action.

The League of Nations also refused to recognize Japan's takeover. It called Japan the aggressor in Manchuria. Japan reacted simply. It withdrew from the League of Nations.

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Henry Stimson

Most Americans were not happy about Japan's clear aggression. But they were not willing to fight force with force. This was less true for Secretary of State Stimson. Stimson was a follower of the old ideas of President Theodore Roosevelt. He believed a nation could only have a strong foreign policy by being strong and using its military power in times of crisis.

But Stimson's voice was in the minority. Most Americans did not believe Japan really threatened the security of the United States. And they were not ready to risk their lives to help people in China. Many Americans would change their opinion about Japan only after its airplanes attacked the American military base at Pearl Harbor, Hawaii, in nineteen forty-one.

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The same story was true in Europe. France was worried about the rising power of the Nazis in Germany, and of Fascists in Italy and Spain. It proposed creation of an international army.

Hoover opposed the plan. He called for all nations to reduce their weapons. He believed negotiation, not force, was the way to solve the problem. But the new leaders in Germany and Japan would listen much more closely to the footsteps of marching troops than to the high words of political leaders or peace supporters.

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VOICE TWO:

You have been listening to THE MAKING OF A NATION, a program in Special English by the Voice of America. Your narrators have been Maurice Joyce and Larry West. Our program was written by David Jarmul.