Unit 6 There are six PowerPoints for this unit There is no packet for Unit 6

Events and Ideas #1 European Financial Crisis World History Unit 6

Essential Question How did the Treaty of Versailles and the Great Depression set the stage for totalitarian leaders to take charge in Europe?

Reminders/Review World War I: 1914-1918 Treaty of Versailles was signed in 1919 and imposed harsh penalties on Germany League of Nations is formed, but the United States does not join. By 1922, Germany is unable to make reparations payments The League of Nations turns out to be weak. The United States does not join the League of Nations making it weak. Americans no longer wanted to be involved with Europe. Belief in isolationism. U.S. Senate refuses to ratify the Treaty of Versailles. U.S. not being a member of the League of Nations severely weakens it. Members of the League would not agree to use force against nations that violated international law.

Agreements for Peace, but Actions Say Otherwise Germany joins the League of Nations in March of 1926. Kellogg-Briand pact is signed by sixty-three nations in 1928. Nations agree that War is bad Does not address what to do if a nation does things that might lead to war In reality, nations: Do not cut back on their military spending. Are unwilling to trust their security to anyone but their own military forces. Outlawing War In 1925, the Treaty of Locarno is signed. Western border of Germany is guaranteed. Headlines read, “France and Germany Ban War Forever.” London Times reads, “Peace at last.” Germany joins the League of Nations in March of 1926. Kellogg-Briand pact is signed by sixty-three nations in 1928. “to renounce war as an instrument of national policy.” Nothing said about what to do is someone violates the policy. Nations do not cut back on their military spending. Nations do not trust each other still and they are unwilling to simply trust their security to anyone but their own military forces.

Germany in a Financial Crisis Inflation skyrockets in Germany. 1919, 1 US $ is worth 9 German marks. Jan. 1923, 1 US $ is worth 18,000 German marks. November, 1923 – 1 US $. is worth 4.2 trillion marks German solution: Print more money – money becomes worthless German offers passive resistance. German workers go on strike. German government continues to pay the workers’ salaries. German inflation (already high due to the war) increases. Inflation skyrockets in Germany. In 1914, 1 U.S. dollar is worth 4.2 German Marks. In 1919, 1 U.S. dollar is worth 9 German Marks. By January, 1923, 1 U.S. dollar is worth 18,000 German Marks. By July, 350,000 German Marks. By August, 5,000,000 German Marks. By November, 4.2 trillion marks. German solution: print more money. Money becomes worthless. German women burning money to start the stove

Dawes Plan American Dawes Plan is put into action. Reparations reduced in line with what Germany can pay. Granted a $200 million dollar loan to for German recovery. This loan opens the door to heavy American investment in Europe. Economic prosperity returns to Europe from 1924 to 1929. American Dawes Plan is put into action. Reparations reduced in line with what Germany can pay. Granted a $200 million dollar loan to for German recovery. This loan opens the door to heavy American investment in Europe. Economic prosperity returns to Europe from 1924 to 1929. Charles Gates Dawes

Draw the following graph on your paper

The Stock Market Crash 1929: The stock market in the U.S. crashes The value of the shares held by investors falls dramatically Investors lost huge amounts of money Many companies lost all value The crash affects the rest of the world U.S. investors pull their money out of banks and other investments in other countries Many banks fail causing international crisis

The Great Depression Depression: period of low economic activity and rising unemployment Many businesses and factories fail or operate at a very low level of productivity Unemployment rate is about 33% Early 1930’s: Dust Bowl hits Oklahoma and other states, destroying wheat production and causing many people to become homeless Depression will last throughout the 1930’s and not really be over until World War II begins A depression is a period of low economic activity and rising unemployment. Two main factors that cause the Great Depression. 1. A series of downturns in the second half of the 1920s. Wheat prices drop dramatically due to overproduction. 2. The crash of the U.S. stock market. Much of the Germany prosperity in the 1920s comes from American loans to Germany. So they can make their reparation payments on time. Money is pulled out of Germany to be invested in the U.S. stock market. When the stock market collapses, investors panic and pull more of their money out of the European market. German and other European banks suffer because of the American withdrawal. Banks start to close. Industrial production declines. Unemployment rises. No work available

FDR Responds to the Great Depression Shanty towns spring up around big cities After 1929, the world is in bad shape economically. 1932 is the worst year of the Great Depression. 1 in 4 workers in Great Britain are unemployed. 40% of the German labor force (6 million Germans) are unemployed. The unemployed and the homeless fill the street. Governments are slow to respond. Traditional solutions attempted. Cut wages and raise protective tariffs. This makes the economic situation even worse. Laissez-faire is at the center of a capitalist economy – or so government thought. Laissez-faire = hands off the economy. Two things happen because of the Great Depression. Government becomes more involved with the economy. Renewed interest in Marxist doctrine. Marx had predicted that it was overproduction that would kill a capitalist market. Communism becomes more popular, especially among the working class and intellectuals. Some political leaders offer simply solutions in return to political power. Democracy goes on the defensive. Franklin D. Roosevelt, U.S. President introduces New Deal programs: Soup kitchens for the hungry Public works jobs are created by government Public assistance programs, like Social Security.

Depression Some countries begin socialist type programs. Government takes over certain resources or means of production and distributes them to population

Europe During the Depression U.S. investors withdraw money from Germany and other European counties. The withdrawal weakens European banks causing many to collapse. 1 in 4 workers in Great Britain are unemployed. 40% of the German labor force (6 million Germans) are unemployed. The unemployed and the homeless fill the streets.

We can save you! Some political leaders promise everything for political power Benito Mussolini Italy Adolf Hitler Germany Joseph Stalin Soviet Union

Essential Question How did the Treaty of Versailles and the Great Depression set the stage for totalitarian leaders to take charge in Europe?