The League of Nations: Origins, Structure, and the Great Depression

The League of Nations: A Quest for International Peace

The League of Nations was established after the First World War to ensure peace and order in international relations. However, it faced several drawbacks, including the dominance of France and Britain, whose veto power allowed them to defend their national interests, and the technical inability to effectively prevent conflicts. The absence of major powers like the USA and the USSR also hindered its effectiveness.

Despite these difficulties, the League contributed to maintaining international peace and collective security, particularly during the implementation of peace treaties (1919-1924). France, for example, demanded war reparations from Germany, but Germany struggled to pay due to its domestic economic problems. The League played a role in the signing of the Treaty of Locarno (1925), which improved relations between Western European nations. The Kellogg-Briand Pact (1928) further promoted peace by discouraging war as a tool for resolving international disputes.

The League's membership expanded after 1920, with Germany joining in 1926 and the USSR in 1934.

Structure of the League of Nations

The League of Nations consisted of the following institutions:

• General Assembly: Comprised of all member states, meeting once per year. Decisions required unanimous agreement.
• Council: Consisted of 5 permanent members and 11 non-permanent members, meeting three times a year.
• Secretary General: Headquartered in Geneva.
• Specialized Bodies: Including the International Labor Organization (ILO) and the International Court of Justice.

The Seeds of Crisis: The Precursors to the Great Depression

Several factors contributed to the economic crisis that would soon engulf the world:

• The United States experienced the emergence of a consumer society in the early 1920s. Purchases were often made using easy credit provided by banks, but there was a lack of real liquidity.
• Overproduction led industries to produce more goods than the market could absorb.
• Low prices for agricultural products reduced the purchasing power of farmers.
• Available capital was invested in the production of goods but also held for speculative purposes, driven by rising share values and high returns. This attracted even small investors.

The Crack of the NYSE: The Stock Market Crash of 1929

Stock prices were highly overvalued. In October 1929, a massive sell-off of stocks occurred on Wall Street. Thirteen million shares were sold in a single day, causing a collapse in their value. Millions lost their fortunes and savings. This event became known as the Crack of the New York Stock Exchange.

The Great Depression: A Global Economic Catastrophe

The effects of the New York Stock Exchange crash spread to the London Stock Exchange and then to the rest of Europe and Japan, with serious consequences:

• The United States implemented protectionist policies to defend its products against foreign competition, a policy that was imitated by other nations. This protectionism negatively impacted trade relations and the global economy.
• Americans withdrew capital invested in Europe, further aggravating the crisis in Europe.
• Investments were halted or significantly reduced, leading to the closure of companies and the bankruptcy of banks that financed them.

Bankruptcies led to increased unemployment and declining domestic demand, which resulted in more factory and business closures and even higher unemployment rates. This created an unprecedented economic depression.