1. The Great Depression Main Idea Why it Matters Now
In the late 1920s an economic depression started in the United States and quickly spread around the globe.
The depression caused great hardship and created ideal conditions for political unrest.
Why it Matters Now
Many social and economic programs introduced worldwide to combat the Great Depression are still operating.

2. Essential Questions
What happened to the U.S. economy during the 1920s?
How did the Depression spread throughout the United States?
How did the Depression affect the world?

3. Postwar Democracies Democracy was new to most of Europe
Citizens had little experience with representative government
Large number of political parties made effective government difficult.
Lack of unity made movements towards long-term goals difficult.
Coalition Governments (Solution)

4. German Weimer Republic Weaknesses
Germany lacked a strong democratic tradition
Too many political parties
German blame for signing the Treaty of Versailles

5. German Inflation Cause and Effects
Government prints money
Why?
Value of the mark decreases
Result = Inflation
A rise in the general level of prices of goods and services in an economy over a period of time
What happened to Savings?

6. Signs of Hope Economic and Political
The Dawes Plan (1924)
Plan to provide Germany with a $200 million loan
Set realistic schedule on Germany’s reparations payments
Inflation slowed
Increased loans and investments from US into Germany
Replaced by Young Plan (1930)
Kellogg-Briand Pact (1928)
Frank Kellogg (Secretary of State of USA)
Aristide Briand (Foreign Minister of France)
Renounced the use of war and called for the peaceful settlement of disputes

7. Flawed U.S. Economy 3 Weaknesses
Uneven Distribution of Wealth
Overproduction
Decreased Demand for Consumer Goods

8. Stock Market Crashes October 29, 1929
Economic Boom
Middle-Class people bought stocks on margin
Crash
Investors felt stocks prices were too high
Future expectations led them to sell stocks
Stock prices begin to decline
Panic ensues
So much to sell but no one to buy

9. Stock Market Crash Results
Increased Unemployment
Decreased Industrial Production
Decreased Prices
Decreased Wages
Increased Business Failures
Increased Loss of Life Savings (Banks)
Increased Loss of Farmers Land (Banks)
Increased Bank Closures

10. Worldwide Effects of American Actions Cause & Effect
American Bankers
Demand repayment of overseas loans
What was the result?
American Investors
Withdrew their money from Europe
American Government
Sets high tariffs on imported goods

11. Britain Responds Dependent on Trade
National Government (A multi-party coalition government)
Policies
High protective tariffs
Increased taxes
Regulated currency
Lowered interest rates (Why?)
Results
Slow but steady recovery
Unemployment cut in half
Increase in production
Democracy Preserved

12. France Responds Self-Sufficient
Popular Front (A multi-party coalition government)
Moderates, Socialists, Communists
Reforms
Increased Wages
Paid Holidays
40-hour Work Week
Results
Price increases offset wages gains
Unemployment remained high
Democracy Preserved

13. Sweden Responds Coalition Governments (Had an existing tradition)
Policies
Public Works Projects
Increased Pensions
Increased Unemployment Insurance
Increased Housing Subsidies
Increased Welfare Benefits
How was this all paid for?
Results
Business prospered
Democracy Preserved

14. Europe’s Response Britain-France-Sweden
What did they all fear could occur due to the Global Depression?
Were they successful in combating that fear?
How?

15. Recovery in the United States Keynesian Economics
President Franklin D. Roosevelt
Believed government spending would…
create jobs
start economic recovery
New Deal Programs
Created Jobs
Offered Welfare Benefits
Provided Financial Aid to Businesses & Farms
Reformed the Stock Market & Banking System
Results
American economic system reformed and idealized
Democracy Preserved

16. The General Theory of Employment, Interests and Money
Keynesian Economics
The General Theory of Employment, Interests and Money

17. German Inflation

18. German Inflation

19. 1923-issue 50 million mark banknote
1923-issue 50 million mark banknote. Worth approximately $1 US when printed, this sum would have been worth approximately $12 million, nine years earlier. The note was practically worthless a few weeks later due to continued inflation.

20. Roaring twenties in Berlin hotel Esplanade, 1926

21. Stock Market Crash – Wall Street (October 29, 1929)

22. Brooklyn Newspaper
Oct 30, 1929

24. Sold Out (1929), cartoon by Rollin Kirby