The Interwar Years: Worldwide Depression Causes and Impacts

US Dominates the World Economy After WWI, the U.S. dominated the global economy because Europe was in debt and recovering from the war. America increased its production to provide goods to Europe and grew wealthier as a result! This time period was called “The Roaring Twenties”

Credit Expands…Dangerous! During the 1920s, credit (giving loans to be paid back at a later date) greatly expanded with risk: if the economy got worse, people would not be able to pay it back! More and more people relied on credit even to purchase stock, hoping the stock prices would rise and they could pay back their credit.

Black Tuesday October 29th, 1929: Stock Market crashes! Value of stocks drop People can’t pay back all the credit! Bank failures, credit collapses Stock Market loses $30 Billion in just 2 days!!!

Global Depression High Tariffs (taxes on imported goods) raised to “protect” US industry! keep money inside country to recover from the crash Result, Europe had to cut back on production, foreign workers lose jobs! High Unemployment everywhere! Great Depression goes global!

The German Hyperinflation Germany struggled to pay back the Reparations of the Treaty of Versailles Decided to print more money to help pay it back. Problem: this policy devalued the German currency, creating hyperinflatation Result: German money became worthless!

The “cost” of Hyperinflation German woman paying for her vegetables with baskets full of Marks At it’s worst in 1923, 1 lb. of bread = 3 Billion Marks (That’s 2.1 Billion US Dollars!!!) German children playing with worthless Marks

Unemployment Rises, Prices Fall! Industrial countries experienced high unemployment! In the U.S. alone, 1 out of every 4 Americans was without a job during the Global Depression! Prices on goods fall in Global Trade, losing their value, making it harder for companies to pay their workers – leads to more cutbacks and job losses!

The Rise of National Socialism The horrible effects of hyperinflation and the Great Depression on Germany, combined with German resentment towards the Treaty of Versailles, gave the Nazi Party a platform and followers! Blamed Jewish bankers and financiers for the global depression

Anti-Semitism Anti-Jewish attitudes Caption reads: “One can do anything to those Goyim (Christians). Our people crucified their Christ on the cross, and we do a great business on his birthday...” Propaganda!

From Democracy to Totalitarianism! The Depression weakened western democracies This gave totalitarianism (citizens under absolute state control) a chance to come to power! People turned to extreme governments to get them out of the Depression! Caption reads, “Work and Bread”