1. Bellringer Download today’s notes: Post War Instability Notes
Answer the following question:
Recall the terms of the Treaty of Versailles. What were the 4 punishments for Germany? How do you think this affected Germany after the war?

2. The Big Idea!
Peace and prosperity were short-lived after World War I as a global depression weakened Western democracies.
1. Discontent with the Treaty of Versailles and a weak League of Nations opened the door to new problems in the interwar years.
2. Underlying economic problems and an American stock market crisis triggered the Great Depression.
3. The Depression shook people’s confidence in political democracy.

3. Treaty of Versailles Unhappiness
The League of Nations was powerless.
The United States never joined.
France wanted security, so they harshly enforced the Treaty with Germany.
Germany owed $33 billion in reparations (132 billion German marks) – must pay 2.5 billion marks each year
Germany made its first payment in 1921, but had a financial crisis the next year and could not pay
France sent troops to occupy the Ruhr Valley in Germany
Germany’s chief industrial and mining industry
France would collect reparations from the mines and factories
What do you think the German response to this was?
How might a stronger League of Nations have discouraged France’s decision to occupy part of Germany?

4. French Invasion of the Ruhr Valley

5. The French in the Ruhr: 1923

6. The French Occupation of the Ruhr

7. German Inflation
Germans passively resisted French occupation – workers went on strike
German government printed more money to pay workers. Why is this a problem?
Inflation – rise in prices
The German mark soon became worthless.
1914: 4.2 marks = 1 U.S. dollar
Nov. 1, 1923: 130 billion marks = 1 U.S. dollar
Nov. 30, 1923: 4.2 trillion marks = 1 U.S. dollar
Disaster for both France and Germany. Why?

8. The German Mark

9. The German Mark

10. German Inflation

11. The price of goods rose so quickly that it was easier to exchange food for items rather than pay for them with money. These people are exchanging food for circus tickets.

12. German Inflation
An international commission proposed the Dawes Plan to fix the problem.
Reduced reparations
$200 million for German recovery
Opened the door for American investment in Europe
Brief period of prosperity lasted from

13. European Debts to the United States

14. Glimpse of Peace
Treaty of Locarno (1925): Germany and France agreed on borders
New York Times – “France and Germany Ban War Forever”
London Times – “Peace at Last”
Kellogg-Briand Pact (1928): 65 nations pledged to “renounce war as an instrument of national policy”
What is the problem with this?

15. Great Depression
Depression – a period of low economic activity and rising unemployment
Two major causes:
1. Economic downturns in many nations’ economies
Prices fell due to overproduction (industrialization and Roaring 20s)
2. U.S. stock market crash
European prosperity was tied to U.S. bank loans to Germany
U.S. investors pulled money out of Germany to invest in the booming U.S. stock market
U.S. stock market crashed in October 1929, and investors pulled even more money from Germany and Europe
European banks collapsed, trade slowed, industrial production declined, and unemployment rose

16. Great Depression
In 1932 (worst year of the Depression) nearly 1 in every 4 British workers were unemployed million (30%) of German workers were unemployed.
Unemployed and homeless filled the streets.
Governments tried to fix things by lowering wages and raising tariffs (taxes on imported goods), but this made things worse and had political effects.

17. Great Depression Major effects:
1. Increased government control of the economy.
2. Marxist ideas (Communism) became more popular due to low wages and high unemployment.
3. Rise of extremist parties - masses of people began to follow political leaders who offered simple solutions in return for dictatorial power. People lost trust in new democracies.

18. Connect! 1. Why did France occupy the Ruhr Valley in Germany?
2. What was the German response to the Ruhr Valley occupation?
3. What is inflation?
4. What agreements gave a brief glimpse of peace in Europe?
5. What were the major causes of the Great Depression?
6. What were the major results of the Great Depression?