The Futile Search for Stability Chapter 9 Section 1

1. What are the kids doing? 1. What are the kids doing? 2. Are they rich/poor/average? 2. Are they rich/poor/average? 3. What nationality are they? 3. What nationality are they? 4. Why would they be playing with money? 4. Why would they be playing with money?

A. Uneasy Peace, Uncertain Security Treaty of Versailles caused serious problems Treaty of Versailles caused serious problems 1) U.S. not allowed to join the League of Nations 1) U.S. not allowed to join the League of Nations –Coalition of nations working together to aviod war 2) France especially harsh to Germany 2) France especially harsh to Germany –Forced them to pay reparations –Germany bankrupt after one payment –France takes Germany’s Ruhr Valley, the chief industrial center –Germany has no way of making money 3) Germany’s economy hyper-inflated 3) Germany’s economy hyper-inflated –Germany had no money, so they just printed more –Caused inflation –Means that value of German money dropped –At one point, $1 U.S. = 4.2 Trillion German Marks

4) U.S. came up with the Dawes Plan 4) U.S. came up with the Dawes Plan –reduced reparations and coordinated with Germany’s ability to pay –also gave a $200 million loan to Germany The plan worked, and Europe exp. A brief period of prosperity The plan worked, and Europe exp. A brief period of prosperity

B. The Treaty of Locarno In 1925, Germany and France signed the Treaty of Locarno In 1925, Germany and France signed the Treaty of Locarno –Treaty guaranteed Germany’s new borders In 1926, Germany joined the League of Nations In 1926, Germany joined the League of Nations In 1928, 63 nations signed the Kellogg-Briand Pact In 1928, 63 nations signed the Kellogg-Briand Pact –Nations denounced the use of war in foreign policy The problems with these new treaties and the Treaty of Versailles, was that there was no way to enforce any of them The problems with these new treaties and the Treaty of Versailles, was that there was no way to enforce any of them Although Germany was not allowed to have a large military, other European countries continued enlarging their own militaries Although Germany was not allowed to have a large military, other European countries continued enlarging their own militaries

C. The Great Flu Epidemic American soldiers carried the flu to Europe when they went to war American soldiers carried the flu to Europe when they went to war By end of 1918, European soldiers stricken with flu By end of 1918, European soldiers stricken with flu Quickly spread throughout Europe Quickly spread throughout Europe The Spanish Flu proved to be deadly The Spanish Flu proved to be deadly In 1918 and 1919, it spread around the world In 1918 and 1919, it spread around the world Killed approximately 22 million people worldwide Killed approximately 22 million people worldwide

D. The Great Depression European prosperity was followed by the Great Depression European prosperity was followed by the Great Depression Depression is a period of low economic activity and rising unemployment Depression is a period of low economic activity and rising unemployment Causes of the Depression Causes of the Depression Two factors helped cause the depression Two factors helped cause the depression 1) A series of economic downturns in several nations 1) A series of economic downturns in several nations –Crop prices dropped rapidly due to overproduction 2) The U.S. stock market crash 2) The U.S. stock market crash –U.S. bank loans given to Germany to pay Britain and France –U.S. began to pull money out of Germany to invest in Stock Market –Oct. 1929, the market crashed b/c investors pulled all money out –In a panic, investors pulled all money out of Germany –Banks all over Europe and the U.S. shut down

E. Responses to the Depression 1932, 1 in 4 British were unemployed 1932, 1 in 4 British were unemployed 6 million Germans unemployed 6 million Germans unemployed Govt’s did not know how to deal with the depression Govt’s did not know how to deal with the depression One solution was that govt’s would regulate business more One solution was that govt’s would regulate business more U.S. had a strong Laissez-faire attitude towards business U.S. had a strong Laissez-faire attitude towards business -this meant no gov’t regulation of business -this meant no gov’t regulation of business The depression also caused many to call for socialism The depression also caused many to call for socialism Worst result of the depression is that people turned to leaders that promised a quick fix Worst result of the depression is that people turned to leaders that promised a quick fix

F. Democratic States After the War President Wilson claimed that the war had been fought to make the world safe for Democracy President Wilson claimed that the war had been fought to make the world safe for Democracy After the war, many European countries switched to Dem. govt’s and gave women the right to vote After the war, many European countries switched to Dem. govt’s and gave women the right to vote Germany changed to the Weimar Republic Germany changed to the Weimar Republic The republic was plagued with problems, especially inflation The republic was plagued with problems, especially inflation France was the most powerful European country after the war, but depression hurt them France was the most powerful European country after the war, but depression hurt them June 1936, Communists, Socialists, and Radicals created a political party in France called the Popular Front June 1936, Communists, Socialists, and Radicals created a political party in France called the Popular Front The party gave workers the right to collective bargaining, which allowed workers to negotiate with employers The party gave workers the right to collective bargaining, which allowed workers to negotiate with employers The party failed to solve the major problems in France The party failed to solve the major problems in France

In Britain, John Maynard Keynes came up with a new theory of economics In Britain, John Maynard Keynes came up with a new theory of economics The old theory was to let depressions work themselves out The old theory was to let depressions work themselves out He said that if you give people jobs, then they put money into the economy, which would end the depression He said that if you give people jobs, then they put money into the economy, which would end the depression U.S. was also devastated by the depression U.S. was also devastated by the depression Franklin Delano Roosevelt was elected in 1932 Franklin Delano Roosevelt was elected in 1932 His policies known as the New Deal provided the reforms that got the U.S. through the depression His policies known as the New Deal provided the reforms that got the U.S. through the depression New deal followed Keynes’ ideas New deal followed Keynes’ ideas FDR tried to create jobs for people FDR tried to create jobs for people