Presentation on theme: "The Cause and Effect of the Great Depression"— Presentation transcript:
1 The Cause and Effect of the Great Depression Problems of the 1930’sThe Cause and Effect of the Great Depression
2 Postwar Issues Postwar Europe faced grave problems: 1Postwar Europe faced grave problems:Returning veterans needed jobs.War-ravaged lands needed to be rebuilt.Many nations owed huge debts because they had borrowed heavily to pay for the war.Economic problems fed social unrest and made radical ideas more popular.The peace settlements dissatisfied many Europeans, especially in Germany and Eastern Europe.Europe lacked strong leaders just when they were most needed.
3 The Stock Market Crash Autumn 1929 October 29 Market Crash Consumer spending slowed, sales sufferedMany feared drop in stock pricesNervous investors began to sell off stocksOctober 29Black Tuesday, 16 million shares of stock sold in one single dayFew people wanted to buy stock, stock prices collapsedInvestors who had borrowed to buy stocks forced to sell at lossMarket CrashStock market crash ruined many investorsBanks that had lent money to investors were also in deep financial troubleDevastating blow dealt to American industry
4 The Stock Market CrashIn 1929, the Wall Street stock market crash ushered in a worldwide financial crisis.
5 The Great Depression Nation after nation fell victim to: Industrial declineBank failuresDeflated prices and profitsCommercial stagnation
6 The Depression Spreads American economy took severe downward dive after stock market crashEconomic downturn became known as Great DepressionDepression result of complex factorsOne factor, slowdown in industry; began before crash, worsened quickly afterGreat DepressionAs industry slowed, workers lost jobsOne out of four unemployed by 1933Joblessness, poverty reduced ability to buy food, goods, hurt industry even furtherBanks suffered when businesses, investors failed to pay off loans; many failedIndustry Slows
7 The Worldwide Depression In 1929 America was one of the world’s leading importers and lenders of money, and created much of the world’s industrial output. Events affecting America’s economy would soon impact other countries.Some countries having difficulties before stock market crashEuropean countries recovering from World War IAllied Powers in debt to U.S.Before the CrashHigh interest rates in Great BritainDecreased spending, high unemploymentGermany’s reparations led to inflation, crippled economyWorld WoesJapan’s economic depression forced banks to closeU.S. Great Depression latest in long series of economic crisesEffects far worseSeries of Crises
8 Personal Hardship People the world over suffered from: Lowered standards of livingUnemploymentHungerFear of the future
9 The Worldwide Depression The postwar era left many countries politically unstable. As the Depression continued, unrest grew worse.Instability in Great Britain and France led to formation of several new governmentsExtremist political groups gained strengthGermany’s Nazi Party blamed JewsItalian dictator Benito Mussolini tightened his control of the nationPolitical ImpactWidespread misery, hopelessness worldwideIdeal conditions for rise of leaders who promised to restore their nations to gloryWorld in midst of troubled timesWorse crisis lay aheadEconomies Worsen,New Leaders Emerge
10 Policies of Self-Sufficiency In desperation, governments sought economic recovery by adopting restrictive policies of self-sufficiency:High tariffsImport quotasBarter agreements
11 Planned EconomiesGovernments experimented with new plans for internal economies.
12 Great BritainGreat Britain adopted far-reaching measures in the development of a planned national economy.
13 Overview: The Great Depression 1Overview: The Great DepressionLong-Term CausesImmediate CausesWorldwide interrelationship of governments and economiesHuge war debtsAmerican loans to EuropeWidespread use of creditOverproduction of goodsIndustrial wages rise as farm earnings fallNew York stock market crashFarmers unable to repay loansBanks demand repayment of loansAmerican loans to other countries dry upWithout capital, businesses and factories failImmediate EffectsLong-Term EffectsRise of fascism and NazismGovernments experiment with social programsPeople blame scapegoatsWorld War II beginsVast unemployment and miseryProtective tariffs imposedLoss of faith in capitalism and democracyAuthoritarian leaders emerge
15 Britain and France in the Postwar Era 1BRITAINFRANCEThe Great Depression intensified existing economic problems.Britain set up a coalition government made up of leaders from all three major parties.The government provided some unemployment benefits.British leaders wanted to relax the Versailles treaty’s harsh treatment of Germany.The French economy recovered fairly quickly.Many political parties competed for power and France was ruled by a series of coalition governments.France created the Maginot Line to secure its borders against Germany.The government strengthened the military and sought alliances with other countries, including the Soviet Union.