Great Depression

1
Great Depression

• Background and causes

2
The war is over

• Europe is in ruins
• Countries are nearly bankrupt
• There is a great deal of uncertainty
• The US and Japan are doing well
• Neither had been a wartime battlefield
• Their influence rose after WWI

3
Unstable Democracy

• New Democracies in Europe
• Russia (provisional government)
• Germany (Weimar Republic)
• Problems lead to instability
• No democratic tradition in some countries
• France and Italy had many political parties

4
Democracy in Germany

• Weimar Republic
• Created in 1919
• 1st democracy in Germany
• Major problem
• Many Germans were angry with the Weimar for
  signing the Treaty of Versailles

5
Economic Crisis

• Background
• During the war, Germany printed more money to pay
  the costs
• of the war reparations.
• Inflation
• Definition when the value of a currency drops
  and prices go up
• Suddenly, German marks became worthless

6
Attempts at Economic Stability

• Dawes Plan
• Began in 1924
• 200 million in loans from the US to Germany
• Designed to stabilize the currency and strengthen
  the economy
• By 1929, Germany had recovered

7
Efforts at a Lasting Peace

• Germany in the League of Nations (1925)
• France and Germany agree never to fight each
  other again

8
The Roaring 20s

• Good times
• Easy money corruption scandals, shady business
  tycoons, and gangsters
• Big Band music, dance clubs
• Athletes become major celebrities
• A Return to Normalcy
• The economy seemed strong
• War was a distant memory

9
Flaws in the US Economy

• Distribution of income
• A wealthy elite kept most of the profits
• Overproduction
• Too much production lower prices
• Lower prices less profit
• Unpaid debts
• Many farmers could not sell their crops
• As a result, banks could not collect debts

10
The Rise of Totalitarianism
11
Desperate Times...

• Global Economic Depression
• Rising unemployment falling production
• Growing inflation destroyed savings
• Failure of moderate governments
• Many democratic governments were unable to deal
  with the crisis
• Russia (provisional government)
• Germany (Weimar Republic)

12
desperate measures

• Radical solutions
• Many stocks became worthless
• Some of the worlds wealthiest people saw their
  fortunes disappear
• Strong leadership
• 9 million people lost their savings
• Many farmers lost their land

13
The Depression Begins

• Unemployment
• Factory production dropped by 50
• Less production meant fewer jobs
• By 1933, 25 of Americans and Canadians had no
  job
• The Vicious Cycle
• Less money available fewer purchases
• Fewer purchases less money available

14
Tariffs Affect Global Trade

• Tariffs
• Definition fees charged on goods produced in
  other countries
• The US tried to protect its own industries by
  making imports more expensive
• Global Trade drops
• Other countries increased their tariffs
• Global trade declined by 65

15
A Global Depression

• Europe
• Austrias largest bank failed
• Latin America
• Many countries could not sell their products
• Asia
• Crop failures led to famine