What happened during the Great Depression?
The Great Depression was a period of economic struggle in the industrialized Western world, lasting from about 1929 to 1939. After World War I, the United States had become a creditor to much of Europe. When the United States' Stock Market crashed in late 1929, it ruined thousands of American banks and disrupted both national and international economy. Because so many European nations were dependent upon the support of the United States, the failure of the American economy hit Europe hard, too.
In many places, production almost came to a halt. Construction, manufacture of goods, even agriculture became severely stunted because companies couldn't afford to pay workers. This became cyclical as employment rates went up-- people couldn't work, so they didn't have money to buy anything and encourage further production. International trade declined greatly, as well. Nations sought to keep their goods in-country to be used and avoid sending potential profits overseas. With the Dust Bowl drought of the mid-1930's, American agriculture suffered even more.
Different countries responded in different ways to the impacts of the Depression. In nations like Germany and Japan, militarist governments intended to restore stability through both regressive foreign and aggressive national policy. In Germany, such policies often did more to address the "symptoms" than the cause of the Depression. For example, Adolf Hitler developed of work-creation scheme which kept people employed and busy, but didn't do much to address the economy itself. In the United States and Britain, welfare states were created with the intent of protecting and supporting the people in times of economic struggle. American President Franklin D. Roosevelt introduced the New Deal, which helped to re-structure the economy to prevent further Depressions and also support those who were suffering in the current one.