A Global Depression Europe After the War New Democracies Are Unstable Weimar Republic Is Weak Inflation Causes Crisis in Germany Attempts at Economic Stability Efforts at a Lasting Peace The Great Depression A Flawed U.S. Economy The Stock Market Crashes The World Responds to the Crisis Britain Takes Steps to Improve Its Economy France Responds to Economic Crisis Socialist Governments Find Solutions Recovery in the United States

World War 1 Europe after war world 1

Effects after the world war Countries directly involved I Winner Countries directly involved II Loser Countries indirectly involved I Colonies

Winner, Tech improvement, reparation Loser Loser, paid the cost, depression Raise taxes to pay the payment [ colonies ] Germany also faced enormous economic problems that began during the war. Unlike Britain and France, Germany did not greatly increase its wartime taxes. To pay the expenses of the war, the Germans simply printed money, after Germany’s defeat, this paper money steadily lost its value. Burdened with heavy reparations payments to the allies and with other economic problems, Germany printed even more money; The result was the value of the mark, as Germany’s currency was called, fell sharply. Severe inflation set in, Germans needed more and more money to buy even the most basic goods. For example, in Berlin a loaf of bread cost less than a mark in 1918, more than 160 marks in 1922, and some 200 billion marks by late 1923. People took wheelbarrows full of money to buy food. The mark had become worthless. Consequently, people with fixed incomes saw their life savings become worthless. The money people had saved to buy a house now barely covered the cost of a table. Many Germans also questioned the value of their new democratic government.

Attempts at economic stability Germany recovered from the 1923 inflation largely thanks to the work of an international committee. Put into effect in 1924, the Dawes plan helped slow inflation. German economy began to recover, it attracted more loans and investments from the united states.

Inflation causes crisis in Germany Germany also faced enormous economic problems that began during the war. Severe inflation set in, Germans needed more and more money to buy even the most basic goods. Consequently, people with fixed incomes saw their life savings become worthless.

10 Pfennig, Copper-Nickel Would buy ½ dozen eggs or 2 ½ pounds of potatoes. Bread is 13 Pfennig for a 1 pound loaf. The Copper-Nickel 10 Pfennig was introduced in 1873 as part of the German Empires first unified coinage. It would continue to be struck until 1916

100 Billion Mark, Nov. 3 1923 City of Freital On November 1 100 Billion Mark would buy 3 pounds of meat. Bread is 3 Billion Mark a loaf. On November 15 100 Billion Mark would buy 2 glasses of beer Bread is 80 Billion Mark a loaf.

Colonies couldn’t have a economic boost They had to pay more taxes Cannot establish a economic base.

A Flawed U.S. Economy The Stock Market Crashes A Global Depression The Great Depression A Flawed U.S. Economy The Stock Market Crashes A Global Depression

Weaknesses of U.S. economy Rising productivity → Overproduction No equal distribution of wealth The richest 5% received 33% of all the income Agriculture: less competitive In competition to Australia, Latin America, and Europe, despite technological advance, US had hard time Less demand for American products than pre-war times.

Stock Market Crashes Over-estimated stock market Investors (mainly of middle class) began buying stocks on margin high risk: remainder of fund for stocks were financed by stockbrokers Some investors had anticipations that the stock prices were too high, over-estimated. Tuesday, October 24th, through the belief that the rate will decline, investors sold their stocks, leading to a downfall in the stock market

Global Depression United States during the post-war era was the center of world economy Thus the downfall of U.S. economy had great effect on global trade Half of the European export was to U.S. High tariffs on each nation after the downfall of U.S. economy reduced global trade by 65%

Germany and Austria in particular were put into financial panic, starting with Austria’s largest bank going out of business European nations that depended on United States in their attempt to reconstruct their economy failed to do so for American investments have stopped and had hard time with their debts Japan also suffered from high unemployment

Video on Great Depression

The World Responds to the Crisis Britain Takes Steps to Improve Its Economy France Responds to Economic Crisis Socialist Governments Find Solutions Recovery in the United States

Britain depended on foreign trade, Depression hit Britain severely *Great Depression – challenged economic and political system  GREAT BRITAIN Britain depended on foreign trade, Depression hit Britain severely National Government (multi-party coalition) designed to rescue the nation from economic disaster passed high protective tariffs, increased taxes and regulated the currency lowered interest rates to encourage industrial growth Brought slow but steady recovery Unemployment cut in half, production rise Avoided political extremes and preserved democracy  

1930- heavily agricultural and less dependent on foreign trade FRANCE 1930- heavily agricultural and less dependent on foreign trade 1935- million unemployed Economic crisis contributed to political instability (1933- 5 government formed and fell) Growth of anti-democratic forces frightened political leaders Popular Front 1936- moderates, Socialists & Communists formed a coalition passed series of reforms – help the workers pay increases, holidays with pay, 40 hour work week Unemployment high but preserved democratic government

SOCIALIST GOVERNMENT Built recovery program on existing tradition of cooperative community action Sweden- government sponsored public works projects, kept people employed and producing Scandinavian countries (northern Europe) - raised pensions for elders, increased unemployment insurance, subsidies for housing & other welfare benefits Benefits paid by taxing all citizens Private and cooperative businesses prospered Democracy remained

UNITED STATES 1932- Franklin D. Roosevelt voted as a president Reformed a program called New Deal Public works projects, provided jobs for the unemployed Agencies gave financial help to business and farms Public money spent on welfare & relief programs Imposed to reform the stock market & banking system Slow recovery but reformed the American economic system Roosevelt’s leadership preserved the country’s faith in its democratic political system   **New Deal- U.S. president Franklin Roosevelt’s economic reform program designed to solve the problems created by the Great Depression **Franklin D. Roosevelt- who created the program New Deal

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