1. A Global Depression
Chapter 15, Section 2

2. Europe After the War Europe was ravage by WWI
Every major European country was bankrupt
Only the U.S.A. and Japan came out in better financial shape then they went in
They both expanded trade during WWI
Europe is no longer the dominate figure in world affairs

3. New Democracies Are Unstable
From the absolute rulers of Europe are overthrown
Hohenzollerns – Germany, Hapsburgs – Austria-Hungary, Romanovs – Russia, Ottomans – Turkey
Russia forms the first new government
Known as? They went quick to the communist
Many political groups = problems for a new democracy
Coalition Government – Alliance among many groups (extremely difficult to work)

4. Weimar Republic is Weak
New German government (after the war)
It was doomed from the start:
Germany had no history of being a republic
To many political parties in Germany at the time
Because the Weimar took over at the end of WWI, people blamed them for the war and outcome
They signed the Treaty of Versailles

5. Inflation Causes Crisis in Germany
The economy in Germany collapses
The Germans did not increase taxes during the war (Britain and France did) they just printed more money
Think about classic market economies
Want for something = more $
Too much of something = the item cost less
Plus Germany had to pay the war debt
A loaf of bread in Germany:
1918 – less then a mark
1922 – 160 marks
1923 – 200 billion marks

6. Attempts at Economic Stability
Germany did recover from the 1923 inflation due to an international committee.
Headed by Charles Dawes (an American banker)
The Dawes Plan provided a $200 million dollar loan to Germany and gave it a realistic timeline to buy back the war debt
It did work and by 1929 Germany was back on its feet

7. Efforts at a Lasting Peace
Germany and France tried to improve relations
Italy, Belgium and Britain came to Switzerland as well
They all signed a treaty that said France and Germany would never make war again (with each other)
Germany accepted the boarders it had and enter the League of Nations

8. Efforts at a Lasting Peace
In 1928 hopes grew from the “spirit of Locarno” (city in Swiss where Ger. Fra. treaty)
The Kellogg-Briand peace pact was signed by almost every country in the world
You cannot use war as a political tool
Explain
Well that’s all good but who is going to enforce it?

9. Great Depression
America had propped Europe up with massive investments if U.S.A. economy collapsed then the worlds economy would as well
And this all happened in 1929
The house of cards tumbled to the ground

10. A Flawed U.S. Economy
The U.S. was prosperous but had three big weakness:
Uneven distribution of wealth
Overproduction
Less demand
Production way up, Common person in U.S. poor, people don’t need all these products, factories scale back production, people are fired

11. A Flawed U.S. Economy
Agricultural production was way up around the world
Soon prices dropped and profits are nonexistent
When factories and farmers could not pay back the loans they took from the banks this caused them to go under and close

12. The Stock Market Crashes
If you do not have money to save you should not be buying stocks
The U.S. economy was way up so people felt they should buy stocks (the prices were going up)
Buying on the margin – Someone buys a stock for a % of the cost and borrowed the rest from a stockbroker

13. The Stock Market Crashes
People believed that stock prices had gotten to high so they started selling off their stock
Prices of stock start to fall and everyone with stock starts to sell, this creates the panic of October 24, 1929
Everyone sold their stock and the financial center for the world The New York Stock Exchange collapsed

14. Stock Market Crash
Billions of dollars in “paper wealth” was gone in a matter of days
The crash, unemployment soaring, outstanding debts cannot be paid, wages down, production down
The Great Depression is born
Many businesses went under, banks included
My people lost their savings when the banks could not pay them
A quarter of all Americans had no jobs

15. A Global Depression America demands to be paid High tariffs all around
World trade drops by 65%
Germany and Austria get it the worst
No country was left undamaged by the Depression

16. The World Responds to the Crisis
Britain takes steps to improve its economy
Heavily on trade economy
A new government was elected
Their actions worked and slowly turned the economy around
France responds to economic crisis
France did not take a big of a blow
1 million workers lost their jobs
Leads to political instability
Moderates, Socialist and Communist form a coalition to help workers rights

17. The World Responds to the Crisis
Socialist governments find solutions
Demark, Sweden, and Norway all have socialist governments that find the way
They create recovery programs
Massive public works
Recovery in the United States
Franklin D Roosevelt creates the New Deal
Large public works to employ workers, bailouts for farmers and businesses, lots of welfare

18. Trouble on the Horizon
With all the economic and societal change it leaves the door open for people with an “idea of direction” to take over