The Great Depression Standard 7-5.3

Following World War I Many nations of the world experienced great economic growth. Unfortunately, this period of economic growth ended in an economic collapse was known as the Great Depression.

The Great Depression After World War I, people in the United States were excited about getting back to normal way of life. They began to buy more products so, manufactures began to send more items into the market. Eventually the demand for products decreased. Warehouses and stores had too many products, but manufactures continued to produce more.

The Great Depression The Government placed high taxes on foreign products. This made it harder for foreign countries to sell their goods to the United States. Since they could not sell their products, they could not afford to buy American products, adding to the problem of overfilled warehouses.

In October 1929 The American stock market crashed. During the economic boom, many people had invested their money in the stock market. When the market crashed, the investors lost most of their money. It simply disappeared.

Stock Market Crash continued… The stock market crash did not only affect the United States. It ruined the economies of nations everywhere. Banks and factories closed. People lost their jobs. The demand for raw resources from other nations decreased.

The Great Depression By the early 1930s, the world economy was destroyed; trade declined and unemployment was at an all time high The world was in a complete depression.

Different responses to the Great Depression The president of the United States, Franklin D. Roosevelt, created programs immediately to help people during the Great Depression. His programs were called the New Deal. The New Deal gave money to farmers to keep their land and create jobs for people who were out of work.

United States response continued…. One of the most important New Deal laws was the Social Security Act. It gave money to people who were retired, disabled, and unable to work for other reasons. The New Deal also fixed some of the problems with American stock market and banking system. Eventually, the New Deal programs helped to bring the U.S. out of the depression.

How did Germany deal with the depression? The response was very different. After losing World War I, Germany became a republic. It was called the Weimar Republic. The Weimar Republic had many problems. Jobs were hard to find and there was high inflation. Most German people lost faith in the government. The people wanted a strong leader.

Adolf Hitler Rose to power. HE helped create the Nazi Party. At first, the Nazis’s were not very powerful. However, as the economic crisis spread, people began to listen to Hitler’s speeches. Hitler promised that the Nazi government could solve Germany’s economic problems.

Hitler and the Nazis Decided that changing the structure of the work force would fix Germany’s economic problems. The government took control of business and labor. They got rid of labor unions and forbid workers from striking. They built roads, factories and weapons. As a result, unemployment dropped substantially in Germany by the mid-1930s.

Great Britain Voters created a new government to deal with the depression. This new government passes high taxes and tariffs and carefully controlled the money supply. It also lowered interests rates so people could afford to borrow money to create new businesses. Great Britain’s policies led to slow and steady decrease in unemployment. Unlike Germany, the British maintained their democracy during this period.