A Global Depression
Unstable Governments & Weak Democracies Fall of Kingdoms/Empires new democracies in Europe. Ruled by others for centuries: don’t know how to rule themselves. Frequent changes in government = instability 1919 Weimer Republic: Germany’s gov’t with a lot of weaknesses.
The Roaring 20’s Fun times reigned Dancing Flappers Drinking
German Inflation/Attempts to Stabilize War Debt Inflation=Cost more than it’s worth. The new concept of “credit” people didn’t have $, but they were spending Germany prints own money=WORTHLESS! Loans from the U.S. Continue to next slide
Continued Why was this bad? Credit system People didn’t really have the money they were spending WWI The U.S. was a major credit loaner to other nations in need Many of these nations could not pay us back
Efforts At A Lasting Peace Treaty of Versailles – Good start but weak no enforcement Germany signed peace treaty w/ France Kellogg-Briand Pact Many nations renounced war (not U.S) League of Nations = FAILED We didn’t join!
Flawed U.S. Economy Europe’s lands = Trashed by war Good for U.S. factories = 50% industrial goods produced at home Uneven wealth: $ goes to factory owners NOT workers Farms: produce too much food lose $ Banks closing!
Stock Market Crash & Global Depression People buying stocks on margin (credit) 1929: Stock Market Crashes: Banks, Margins, BAD loans, back loans Tariffs: stop buying each other’s goods; world trade drops 65% European banks = NO $ Can no longer support Mandates (colonies) MAIN CAUSE closing of banks
The Stock Market People bought stocks on margins Stocks fall If a stock is $100 you can pay $10 now and the rest later when the stock rose Stocks fall Now the person has less than $100 and no money to pay back
With people panicking about their money investors tried to sell their stocks This leads to a huge decline in stocks Stocks were worthless now People who bought on “margins” now could not pay Investors were average people that were now broke And then….
What about the people? Farmers were already feeling the effects Prices of crops went down Many farms foreclosed People could not afford luxuries Factories shut down Businesses went out Banks could not pay out money People could not pay their taxes Schools shut down due to lack of funds Many families became homeless and had to live in shanties
Many waited in unemployment lines hoping for a job.
People in cities would wait in line for bread to bring to their family.
Some families were forced to relocate because they had no money.
President Hoover Herbert Hoover was president at the start Philosophy: We’ll make it! What He Did: Nothing The poor were looking for help and no ideas on how to correct or help were coming
“Hooverville” Some families were forced to live in shanty towns A grouping of shacks and tents in vacant lots They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.
Hooverville
The World Responds Britain: Very industrial, depression hit hard. High tariffs; increased taxes; regulated $, led to slow recovery. France: self-sufficient, agriculture economy, less foreign trade = weak depression Socialist govt’s: heavy govt. involvement & taxes (still today) = no depression United States: Hoover: did nothing to help the depression. 1932: Franklin Roosevelt elected & starts New Deal, brings $ to U.S. & creates jobs
*FDR* When he was inaugurated unemployment had increased by 7 million. Poor sections (like Harlem) had 50% of the population unemployed Created the “New Deal”
The End http://www.youtube.com/watch?v=JDcR-ZS5fyw&safety_mode=true&persist_safety_mode=1&safe=active