A Worldwide Depression After World War I, an economic depression in the United States spreads throughout the world and lasts for a decade. 1920s & 1930s

Postwar Europe Unstable New Democracies After WWI, empires create new democracies in Europe People have little experience with representative government Some form coalition governments—temporary, multi-party alliances Frequent changes in government create instability People more willing to accept strong, authoritarian leadership.

The Weimar Republic Democracy in Germany Weimar (VY mar) Republic—Germany’s democratic government formed in 1919 Government has serious weaknesses Lacked strong democratic traditions Blamed the gov’t for the country’s defeat and humiliation caused by the ToV (1918). Inflation Causes Crisis in Germany Value of German currency falls dramatically Rather than tax individuals they printed more money; losing its value which led to inflation Attempts at Economic Stability American bank loans help to revive German economy Charles Dawes – Dawes Plan - $200 million loan from American banks to stabilize German currency. Efforts at a Lasting Peace Germany and France sign treaty pledging no more war. They would respect the existing borders of France and Belgium It was then admitted to the LoN. Many nations sign a similar agreement, the Kellogg-Briand pact (Treaty) - No way to enforce!!! The LoN had NO armed forces and the U.S. refused to join the League.

Financial Collapse A Flawed U.S. Economy Economy boomed in the 1920s But…. Wealth is distributed unevenly Richest 5% received 33% of all personal income. While 60% of all American families earned less than $2k. Most people are too poor to buy goods produced - start buying on credit, but can’t buy anymore. Store owners cut back their orders since people aren’t buying. So factory owners cut back on production, lay off workers Farmers produce more food than people can eat Competition abroad led to the inability to profit Many farmers cannot repay loans and lose their land Unpaid debts weakened banks and forced some to close.

Financial Collapse The Stock Market Crashes Stock prices soar Many people buy stocks on credit Investors begin selling stocks, which lowers prices On October 29, 1929, stock market collapses as prices fall very low Many people started sold their stocks and no one wanted to buy. Start at 1:00 Buying on Margin https://www.youtube.com/watch?v=wAZ-RpAO1z4 Economic Downturn Great Depression—long business & economic slump of 1930s Marked by bank failures, loss of savings, unemployment A Global Depression American economic problems create problems in other countries World trade falls sharply Nations raise tariffs wanted sales by local businesses Effects Throughout the World Germany and Austria suffer greatly, as do Asia and Latin America

U.S. recovers from the Great Depression Recovery in the United States Franklin D. Roosevelt—American president during Depression New Deal—Roosevelt’s program of government reform to improve economy Govn’t created jobs by: new projects (roads, dams, bridges & buildings Business and farmers got help, too For Professional (artists, photographers, historians, teachers, etc.) The economy got better, but recovery was slow (took all of the 1930s until WWII)

Fun fact In 1995, following reunification of Germany (Berlin wall falls in 1989), Germany made a final installment of $94 million to the U.S. on Oct 30, 2010 to settle German loan debts in regards to war reparations from both World wars.