WHII: SOL 11b Great Depression

Introduction A period of uneven prosperity in the decade following World War I (the 1920s) was followed by worldwide depression in the 1930s. Depression weakened Western democracies, making it difficult for them to challenge the threat of totalitarianism.

Causes of worldwide depression German reparations because Germany was required to pay for the cost of World War I, it printed large amounts of money to do this, causing the value of its currency to decline Expansion of production capacities and dominance of the United States in the global economy High protective tariffs Excessive expansion of credit Stock Market Crash of 1929

Vocabulary runaway inflation: As prices rise, the value of the currency declines; soon things become so expensive that people cut back on their buying, which leads to companies cutting back, which leads to layoffs of employees. protective tariffs: When countries place high tariffs on imported goods, other countries retaliate, leading to a “tariff war.” As a result, jobs are lost in the import-export businesses.

Vocabulary overproduction: When companies overproduce, inventory accumulates and production is cut back, leading to layoffs of employees. rapid rise in stock prices: When stock prices go up rapidly, buying stock increases until many stocks become overvalued and a panic occurs, dropping prices too quickly and wiping out many people’s investments.

Impact of worldwide depression High unemployment in industrial countries Bank failures and collapse of credit Collapse of prices in world trade Nazi Party’s growing importance in Germany; Nazi Party’s blame of European Jews for economic collapse

Impact of worldwide depression Weakening of the democracies as they struggled to cope with the economic losses of homes Popularity of fascism and its relation to National Socialism