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First of all, because of the great depression, countries like Japan and Italy wanted to expand their empires so as to get hold of new economies, so Japan invaded Manchuria in china which is a rich region, thus it would improve the falling economy. But the League of Nations was not able to impose economic sanctions over Japan, because 1. The USA, Japan's main trading partner would keep trading with Japan. 2. Non of the members of the League wanted to stop trading because it would worsen the bad economy.
This was also the case in the Abyssinian Crisis, Which have lead to the serious underestimation of the League, thus the League lost it's authority which eventually lead to it's downfall in 1940 and the second World War.

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