Chapter 15 – Years of Crisis ( ) Section 2 – A Global Depression
Main Idea- An economic depression in the US spread throughout the world and lasted for a decade Why It Matters Now- Many social and economic programs introduced worldwide to combat the Great Depression are still operating
Europe After the War New European democracies formed after the war are weak – Frequent changes in govt make it hard for democracies to develop strong leadership Coalition governments (temporary alliance of several parties) would be used Germans are upset and blame one group…?
Weimar Republic Many German’s blame the Weimar govt for their countries’ problems – Germany’s post war democratic government had major weaknesses No strong tradition of democracy Lots of political parties People blame govt not military leaders for war loss
US tries to help world depression Dawes Plan (1923) – $200 million to help stabilize German inflation and start economy Jump-started Germany’s factories Kellogg-Briand Peace Pact (1928) – World countries pledged to “renounce war as an instrument of national policy.” – Almost every country signed this pact
Unfortunately…. The Great Depression In the late 1920’s, the US economy has serious weakness 1.Uneven distribution of wealth 2.Overproduction by business and agriculture 3.Less demand for consumer products In October 1929, the US Stock Market crashes and leads to severe business slump
Great Depression cont…. Great Depression causes business failures and bank closers The collapse of the US economy leads to a global depression Who had been covering the world’s expenses up to this point? Now where does the money come from?
The World Responds The GD challenges democratic political systems in Europe and the US – Britain forms a coalition National Government the preserves their democracy – In France, the depression contributes to political instability but democracy is preserved In the US, President Franklin Roosevelt’s New Deal reform program starts – Creates economic recovery in the US, if only in a small amount