The Great Economic Depression destroyed or shattered international trade. This was as a result of the policy of economic protectionism which was largely pushed by USA. Other countries also responded to this through retaliation and therefore adopted protectionism measures as they could not allow others to sell to them because every country had surplus products. This further frustrated the possibility of commercial intercourse or transactions between countries.

It also created social unrest in many developed countries in Europe. Almost all governments had failed to resolve the problems resulting from the Great Economic Depression. These included poverty, unemployment and starvation. These hardships therefore encouraged rebellions against the existing governments which had lost public confidence as the masses wanted to overthrow them and put in power those that they hoped would end their suffering

It led to the collapse of industries and other economic sectors. This was because they could not find adequate market for their goods. Consequently, their prices went down which therefore acted as a disincentive to investment, hence leading to the subsequent closure of the industries, banks and insurance companies in several European countries.

It also led to further widespread unemployment as people failed to secure jobs. During the depression, banks were closing, factories were shutting down and yet governments were not recruiting civil servants because of their inability to pay them attractive salaries and wages. This widespread unemployment in turn, brought about other problems like general poverty due to low incomes which increased the misery or suffering of the masses.

It accelerated the decline in the standards of living as people could not afford the basic needs of life not because the cost of living was high but because money was scarce to purchase the available goods. During this period, people could not afford decent housing, food, basic medical care and other necessary demands of life which further increased misery or suffering in several countries.

It led to the fall in the prices of products. The Great Economic Depression was a result of over production of both agricultural and industrial products in the 1920s yet there was less money to buy these goods. This eventually led to a fall in the prices of goods since there wasn’t enough money to buy the goods on the markets. This led to a decline in the profit margins of the investors which worsened the global economic crisis.

International relations among countries broke down as result of the Great Economic Depression. For example, the European countries blamed USA for her policy of economic protectionism or nationalism which disturbed free international trade.  Enemity increased as the USA continued demanding for the repayment of her war debts or loans from the European countries like Germany, Britain, France, Austria and Bulgaria among others despite the prevailing economic hardships or problems.  Even in Europe enemity increased as the victorious powers continued demanding for reparation payments from the defeated Germany. This therefore undermined the hope for lasting peace in Europe.

The Great Economic Depression led to political unrest or insecurity in Europe which gave rise to dictators. For example, in Germany the depression created serious economic hardships like widespread unemployment and poverty due to the collapse of banks and factories. The Weimar Republic which was in power by then was unable to solve these economic problems which increased its unpopularity. Consequently, Adolf Hitler exploited this unpopularity to overthrow the Weimar Republic and come to power Germany in 1933 as he promised to solve the economic problems created by the depression. The rise of these dictators increased the ideological differences and enemity between the Fascist states like Germany and Italy and the democratic states like Britain and France which trying to defend the spread of liberal democracy in Europe. This undermined any hopes for lasting peace in Europe.

It also undermined the performance or work of the League of Nations. Countries refused to subscribe funds to the League of Nations because they were pre-occupied with solving their own domestic problems. Thus, the idea of collective security didn’t work. This was exploited by Germany, Italy and Japan to undermine the work of the League of Nations.  Similarly, countries refused to co-operate in international trade because they could not allow others to sell to their markets. Therefore, the League of Nations failed to achieve the objective of international co-operation because of the economic depression.

The depression facilitated the spread of the Russian ideology of socialism (communism) especially in Eastern Europe. The depression had been blamed on the idea of economic liberalism as emphasized by capitalism in which the quest for high profits by the capitalists made the whole world suffer. The socialist agitators then prescribed socialism as the best alternative. They asserted that socialism would improve on the suffering of the poor workers and ensure good standards of living. At the same time, many countries admired Russia which was not severely affected by the depression because of her socialist orientation. As a result, many Eastern European countries like Yugoslavia, Czechoslovakia and Poland among others embraced socialism or communism.        

It contributed to the collapse of the banking system in several countries. During the depression, banks ran out of money was because the customers withdrew their savings and as a result, banks had to close.  Such banks included the Austrian Central Bank which closed in 1931 and the Central Bank of Germany.

It also facilitated the downfall and rise of new governments as a result of the discontent caused by the depression plus the failure by the existing governments to address such problems. In the USA for example, Franklin Roosevelt who was a Republican replaced Democratic government. In Germany, Adolf Hitler and his Nazi Party rose to power in 1934 and replaced the Weimar republic after the death of President Hindenburg while in Britain, the Labour Party government of Prime Minister Macdonald which could not deal with the problems resulting from the Great Economic Depression was forced to resign in 1934 and replaced by the Conservative Party. In Spain, the Liberal Republican government was overthrown by General Franco in 1939 after three years of a civil war from 1936. These new governments tried to overcome the depression by introducing several economic reforms in their respective countries.

The depression also gave birth to new economic reforms especially in USA. For example, the employers were encouraged not to lay off workers. The government also tried to recapitalize the banks as well as giving incentives or subsides to the industrialists and farmers to combat unemployment. Other reforms included the introduction of pension schemes, unemployment benefits and insurance schemes. Trade unions were also founded. In Britain, the new government also established unemployment insurance schemes to cater for the unemployed. There was also payment of relief or money to the poor and Britain also declared free trade which was followed by other countries in Europe so as to end the depression.

The Gold standard system was abandoned in Europe as a measure of controlling money in circulation up to date. European countries started controlling their money in circulation without reference to the amount of gold that they had in the banks. This was because the system had created economic rigidities before 1929 that led to the occurrence Great Economic Depression. In addition, during the depression people had rushed to the banks to withdraw their money in form of gold and the banks had to close.

The economic depression led to colonial rivalry as well as military aggression by the strong states against the weak ones. For example, in 1931 Japan invaded the Chinese Province of Manchuria so as to secure markets and raw materials. Italy also attacked and occupied Ethiopia in 1935 in search for raw materials and Germany invaded the Saar Coal fields as well as the Rhine lands among other territories. Therefore, the depression caused interstate conflicts and battles which threatened peace in the world.

The Great Economic Depression, however, led to the development of some major industries that proved to be very essential at that time of global economic collapse. These included the Radio industry to increase adverts as well as the automobile industry to facilitate the transportation of goods to the market centres so as to offset the surplus products in the different countries. This was perhaps one of the major positive results of the Great Economic Depression worth noting.

It also disqualified the classical Economists and therefore new revolutionary Economists like John Maynard Keynes emerged with new economic theories to explain the causes and solutions of the unemployment of the 1930s. During the Great Depression of the 1930s, John Maynard Keynes spearheaded a revolution in economic thinking, challenging the ideas of the classical economists that held that the free markets would, in the short to medium term, automatically provide full employment, as long as the workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment. In the mid to late 1930s, most Western economies adopted Keynes’ policy recommendations so as to overcome the economic depression.

It laid a foundation for the outbreak of World War II in 1939.  The doctrine of liberalism and democracy had been denounced due to their failure to solve the economic depression. This gave rise to world dictators like Adolf Hitler of Germany and General Franco of Spain with the support of their population that hoped that these dictators would solve their economic problems. While they were in power, these dictators got involved in acts of aggression which eventually led to the outbreak of World War II in 1939.


Problems experienced by the Imperial British East Africa Company in Kenya

  • There was a scarcity of mineral wealth and profitable export commodities which made it difficult for the company to generate enough wealth to meet the cost of administration.

  • There was a poor transport network which made the movement of goods slow/ difficult/ expensive thereby making the enterprise less profitable.
  • There was a lack of proper coordination between the company headquarters in Britain and the officials in Kenya hence delays/ waste and misunderstandings.
  • The company officials lacked the experience which was necessary for the success of the administration in the protectorate.
  • Some of the company officials were corrupt and therefore concentrated on their personal enrichment at the expense of the enterprise.
  • Resistance from the local communities posed a great challenge to the company as it had to administer and at the same time suppress the communities.
  • There was inadequate capital to carry out its operations thus making the administration of the protectorate ineffective.

  • Unfavorable climatic conditions/ tropical diseases claimed the lives of some of the company personnel.
  • Lack of enough personnel.
  • Rivalry from German East Africa affected its operations.

The factors that promoted international trade along the east African coast

When Seyid Said took control of Zanzibar, he encouraged foreign traders to trade with Zanzibar in order to develop new markets for products from the East African mainland.

He strived to attract Indian money lenders (Banyans) to come and settle in Zanzibar, which increased the volume of trade in east Africa.

the factors that promoted international trade along the east African coast.

  • The Monsoon winds, which facilitated transport.
  • Trade between the coast and the far east, which existed before the 19th century.
  • Demand for goods at the coast and the outside world.
  • Availability of trade goods like ivory, gold, slaves, beads and guns.

  • Protection of Arab and Swahili traders by the Sultan.
  • The deep harbours and good beaches as well as the accessibility of the region by sea, which attracted traders.
  • Imposition of a unified customs duty of 5% by the Sultan, which encouraged trade.
  • Introduction of a monitory system by Seyid Said, which facilitated trade. Copper coins, Spanish Crown and Maria Theresa dollars were used.
  • Indian Banyans or Baluchis (money lenders), who financed trade by giving credit facilities to the traders.


the communities in East Africa which participated in the long distance trade in the 19th century. .

  • The Akamba,
  • Mijikenda,
  • Nyamwezi,
  • Khartoumers,
  • Waswahili,
  • Yao,
  • Arabs
  • Baganda.

What led to the decline of Akamba dominance in Long Distance trade?

  • Loss of trading partners such as the Aembu and the Agikuyu due to Oromo raids.
  • British colonization, which undermined the trade.
  • Abolition of the slave trade, due to which the main item of exchange (slaves) was lost.

  • Attacks by the Maasai and Oromo on the trade routes.
  • Competition from Arab and Swahili traders, who penetrated the interior to get goods from the sources.

Reasons for the formation of the League of Nations in 1920

The League of Nations was established by the victors of the First World War in 1920 at the treaty of Versailles with the main aim of preventing the occurrence of another war.

The idea of its formation was mooted by Woodrow Wilson, the US president who was supported by Lord Robert Cecil of Britain, Jan Smuts of South Africa and Leon Bourgeois of France.

Reasons for the formation of the League of Nations in 1920

  • It was formed for the Maintenance of world peace / It was specifically created to prevent the outbreak of another world war
  • The League of Nations was meant to foster international cooperation in solving problems as they arise.
  • It was formed to jointly take instant action against an agreed aggressor by economic and possibly by military means.

  • Members were to secure and maintain fair and humane conditions of labour as one way of maintaining peace in the world.
  • It was formed to oversee development of territories lost to central powers during the First World War. E.g. Tanganyika, Togo, South West Africa etc.


The reasons for establishment of economic and social council in kenya

the following are reasons for the establishment of the Economic and Social Council in Kenya.

  • To advise the national government and Parliament on matters of economic and social concern to the people of the Republic.
  • To advise the national government on the formulation, implementation, monitoring and evaluation of strategic economic and social policies.
  • To consider and report to Parliament on the economic and social implications of all Bills and budgetary proposals introduced in Parliament.
  • To monitor progress in the improvement of the living standards of the people of Kenya, particularly those of the poor and the disadvantaged.

Reasons why devolved governments were established in Kenya

The following are reasons why devolved governments were established in Kenya.

  • They were established as a means of promoting democratic and accountable exercise of power.
  • To Foster national unity by recognizing diversity.

  • To give powers of self-governance to the people and enhance the participation of the people in the exercise of the powers of the State and in making decisions affecting them.
  • To recognize the right of communities to manage their own affairs and to further their development.
  • To protect and promote the interests and rights of minorities and marginalized communities.
  • To promote social and economic development and the provision of services throughout Kenya.
  • To ensure equitable sharing of national and local resources throughout Kenya.

  • To facilitate the decentralization of State organs, their functions and services, from the capital of Kenya;
  • To enhance checks, balances and the separation of powers.


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