1. Depression and Fascism

2. Boom The Great War had left America in a position to become a leading industrial nation. The American steel and petroleum industries led huge economic growth. Many American began to invest in the stock market.

3. Bust Stock markets buy and sell shares in companies. Investors often try to make money by speculating on the price of the stock rather than waiting for dividends. Many bought stocks “on margin”. Companies began to focus more on paying dividends to investors and less on paying workers. But as companies made more and more product, their customers couldn’t afford to buy more. American agriculture ran into similar problems of over- production.

4. Black Tuesday As profits began to fall through the summer and autumn of 1929, stock prices began to go down. Investors who bought on margin could not repay their loans and had to sell more stock. But selling a stock causes its price to fall, more investors try to sell before they loose money. In late October 1929 this situation started a wave of panic selling. The New York market lost 13% of its value October 28, and another 12% the following day.

5. The Great Depression When people were not able to repay loans, banks started to run out of money. What do people do when they think their bank is in trouble? Run to the bank to take their money out. Bank runs forced several banks to fail in 1929 and 1930.

6. The Dust Bowl Farmers often have to borrow money to afford to buy seeds to plant. If they have a bad year and can’t pay, the bank may foreclose. Thousands of family farmers lost their homes and land. Many of them began travelling looking for work as migrant labor.

7. The Dust Bowl With so many farms abandoned few crops were being planted. Combined with the dry weather and poor soil management, this led to huge dust storms that covered large parts of the US plains.

8. Global Depression Economic depression was nothing new, it is a fact of capitalism. But for the first time a depression hit a global economy. The economic problems of the US rippled through the whole world. Unemployment in developed nations reached 20- 30%. This led to political instability in both developed and developing countries.

9. Europe In countries with long democratic traditions like Britain and France, the government changed hands and new economic policies began to turn their economies around. In Scandinavia, the emerging democracies adopted socialist policies that helped their people through the worst of the depression. In the U.S., the government changed hands and the new President introduced social welfare policies. In Spain, Germany, Italy, Japan, and Thailand people looked for a strong leader to restore order.

10. Il Duce In the early 1920’s, Italian newspaper publisher Benito Mussolini began organizing a new political movement. Mussolini wanted to promote Italian nationalism over socialist and communist ideas. Street fights between rival political parties were common, Mussolini played them up in his papers then organized armed veterans, his “Black Shirts” to break up the fights. Mussolini used this to present himself as the strong leader Italy needed.

11. Fascism Mussolini appealed to Italian nationalism by alluding to imperial Rome. He chose as his party symbol the fasces. In 1922, Mussolini was ready to take power. His followers organized 60,000 men to march to Rome and demand the resignation of Italian Prime Minister Luigi Facta. Facta tried to order the army to attack the Fascists, but the King of Italy refused to sign the order. Two days later the King invited Mussolini to become PM and form a new government.

12. The Furher In 1923, a small socialist workers party failed in a coup attempt Germany. The leader of the party was sent to prison. While there he wrote a book outlining his plan for Germany and the German People. After six months, Hitler was released. The National Socialist German Workers’ (Nazi) Party tries to go mainstream, but they earn only a few percent of the vote. Hitler organizes “Brown Shirts” to match Mussolini’s Black Shirts.

13. Nazism When the Great Depression hit Germany, Hitler and the Nazis were quick take advantage. They blame Jews and Communists for all of Germany’s problems. Hitler runs for President in 1932, loosing to the incumbent war hero, Paul von Hindenburg. Later that year Hindenburg called for parliamentary elections. Two elections failed to result in a majority government. Hindenburg invites Hitler to become Chancellor (PM) of a coalition government. Hitler immediately calls for new elections. The night before the election, Brown Shirts set fire to the Reichstag, blaming communists for the fire.