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When the American tariffs combined with our demand for reparations, did that mean it...

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tourlay99 | Honors

Posted July 27, 2013 at 7:44 PM via web

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When the American tariffs combined with our demand for reparations, did that mean it was too expensive for foreign countries to trade with us?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted July 27, 2013 at 8:13 PM (Answer #1)

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Both the tariff and the issue of reparations helped to cause the Great Depression, but I would not really agree with the way in which you state the connection in this question.

First, it is not correct to say that the US demanded reparations.  The US opposed reparations at the Treaty of Versailles and the US did not receive any reparations from Germany.  The French and British did demand reparations, but the US did not.  Second, it is not really right to say that tariffs made it too expensive to buy American goods.  Let us look, then, at the connection between tariffs, reparations, and the Depression.

The tariff helped cause the Depression by making it hard for other countries to sell to the US.  When the countries were unable to sell to the US, they did not make as much money as they previously did.  Since they made less money, they were less able to buy American goods.  One effect of the tariff, then, was to reduce the ability of foreign countries to buy American goods.  However, this was not because it was too expensive to trade with the US.

The French and English required Germany to pay reparations.  This harmed Germany badly.  However, the French and English needed the money in order to pay the debts they owed to the US.  The US lent money to the Germans who used it to pay reparations.  The reparations then allowed the French and English to buy from the Americans.  When the US stopped lending, this system fell apart and the French and English could no longer buy from the US.

So, there are connections between tariffs, the reparations, and the Depression, but I would state the connection differently than you do in this question.

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