2.  America had a lot of money!  Avoided the destruction that Europe experienced during WWI  Made a lot of money helping to rebuild Europe  Made massive loans to France, England & Germany  Why not Soviet Union?  Poised to become a world power

3.  At the end of WWI, the British Empire was at its greatest extent  They took over Palestine, Iran & Iraq from Ottoman Empire  BUT Britain was dramatically changed  2.6 million casualties  Women entered workforce  Inflation hurt people on fixed incomes

4.  6.97 million casualties  Political desire to avoid another war with Germany, at any cost  “Appeasement Policy” (A political policy of conceding to aggression by a warlike nation.)  France didn’t protest when Hitler violated the Versailles Treaty  Built A political policy of conceding to aggression by a warlike nation along German-French border  Elaborate system of forts to protect against German attack

5. Germany’s new government = Weimar Republic Democratic republic with an elected president and parliament, the Reichstag Government was blamed for losing WWI and the Versailles Treaty Economic problems Couldn’t pay war reparations In 1923, France occupied Ruhr industrial region But by 1928, Germany’s economy had recovered to 1913 levels

6.  China  Last Emperor abdicated in 1916, leaving regional warlords ruling country  Encouraged by USSR, Chinese Communist Party started in 1925  Chiang Kai-Shek took over most of country while fighting war against Communists

7.  After WWI, militarism, racism and nationalism became powerful forces in Japan  Began establishing their empire  Korea, 1904-05  German colonies in Pacific, WWI  Manchuria, 1931  China invaded, 1937

8.  Created out of Versailles Treaty  Goals  Disarmament  Prevent war through collective security  Settle disputes diplomatically  League had no military force of its own (Great Powers)  Incapable of preventing aggression, during 1930s  Member states = 44, including UK, France, Italy  But NOT USA, b/c Dems and GOP opposed it

9. o Wages were not keeping up with inflation o Falling crop prices hurt Europe’s recovery o Economic Nationalism o Tariffs were high o That meant European countries couldn’t sell to US, each other o High inflation + high tariffs meant European countries couldn’t afford US goods

10.  Causes  Inflation (prices up)  Wage stagnation  High debt levels of individuals & business (interest payments)  Businesses began to fail = unemployment = less $ being spent = more business fail  International trade declined due to high tariffs  NY Stock Exchange collapsed on 10/29/29 (Black Tuesday)

11.  Worldwide effect  Prices and wages plummeted  Unemployment skyrocketed  Germany stopped payments to allies  European countries stopped interest payments to US  US banks began closing as people demanded money from them

12. AAmerica raised tariffs, cut off Europe from loans BBritish raised tariffs, increased trade within Empire FFrench weren’t as industrialized, so less effect; but political unrest was high GGermany’s Weimar Republic died IInflation made $ worthless; currency was worth more as bulk paper SStrengthened National Socialist German Workers Party (Nazis)