The Great Depression

At the end of the 1920s… Europe was rebuilding. Most of Europe was bankrupt. The U.S. did not have this problem. The American economy grew during WWI.

Isolationism Even though the US could help Europe they chose a policy of Isolationism Isolationism: a policy of avoiding political or military involvement with other countries.

New Leadership At the end of the war, many leaders had been overthrown. Many political parties in European countries led to difficult governments that got little done. In Germany a new democratic government was set up, it was called The Weimar Republic

Issues in Germany Owed 32 Billion after WWI to Britain and France. Instead of raising taxes to pay off the war, Germany printed more money in 1923. What problem does this lead to?

Fixing Germany’s Inflation Inflation: when the price of goods & services increase due to the decrease in the value of money. Germany was able to recover from Inflation with the help of American Banker, Charles Dawes. The Dawes Plan: a plan to collect payment from Germany for WWI by boosting Germany’s economy with loans from Americans. By 1929, German businesses were back to normal!

The U.S. Supports the World Economy America’s economy had been going strong in the 20s. The United States had been supporting a lot of the world’s economic systems. This made the Global Economy like a set of bowling pins. If the front one (USA) was hit it could bring all of them down.

The Weaknesses of the U.S. Economy Uneven Wealth Distribution 60% of Americans earned less than $2,000 a year The richest 5% of Americans held 33% of the income. Americans were buying less Because most families can’t afford goods, businesses cut back on production. When businesses still weren’t profiting, they were forced to lay off workers. Over-Production of goods Due to agricultural advances, farms were producing more. A high supply drove prices down. Led to farmers owing $$ to banks.

NYC’s Wall Street At the heart of Wall Street was the New York Stock Exchange. With the price of stocks rising, many middle class people bought stocks on margin. This means they pay a small payment and borrow the rest from a stockbroker. This works well as long as prices are rising. If they fall, the people are left paying off the loan.

The Stock Market Crashes In September of 1929, investors felt like stock prices were too high. They began to sell their stock, hoping that prices would come down some. People began to panic and sell their stocks before prices dropped too low. No one wanted to buy stock at this time due to the panic. On October 29th, 1929 a date now known as Black Tuesday, a record 16 million stocks were sold and the Stock Market crashed.

The Great Depression in the U.S. The Great Depression: a world-wide economic crisis which lasted from 1929 to the beginning of WWII. Expensive stocks became worthless. Debt increased. Unemployment rose. Factory production is cut in half. Failed businesses. Banks closed – 9 million lost their money.

Black Tuesday Affects the World! Countries that depended on exporting goods to the U.S. suffered Global trade dropped 65% Other countries are forced to tax their people more. Unemployment soared. Which foreign country do you think will be effected most?

Fascism Grows in Europe During the Great Depression many people lost faith in democratic governments. Fascism: a new political movement that promotes an extreme loyalty to the country and its leader. They believed in the struggle – peaceful countries were weak & could be taken over They believed they had to give up their rights and follow their leader – NO MATTER WHAT!

Fascism in Italy Italians turned on their democratic government because they felt like it didn’t deal with the following issues effectively... Italians were bitter after they weren’t given new territories at the Paris Peace Conference. Rising Inflation. Rising unemployment rates.

Fascism in Italy Benito Mussolini promised to revive Italy’s economy and army. In order to take over, he and 30,000 fascists marched to Rome and demanded that King Victor Emmanuel III put him in charge. As leader he… Outlawed democracy Outlawed other political parties Censored radio stations and news Outlawed strikes by workers

Fascism in Germany Adolf Hitler joined the National Socialist German Workers’ Party (Nazi Party) in 1919. Nazism: an extreme form of fascism where racial superiority and nationalism are key. As leader of the Nazi Party, Hitler was inspired by Mussolini and in 1923 he tried to take over in Munich, Germany. It FAILED. Hitler was arrested for treason.

Fascism in Germany In jail, Hitler wrote a book that set forth all of his beliefs and goals. The book was called Mein Kampf or My Struggle The book talked about… Aryans: Hitler’s perfect “master” race which consisted of the Germans His Anti-Semitism: hate for Jews How Germany was robbed of their land in the Treaty of Versailles

Fascism in Germany After prison, Hitler travelled around Germany to promote the Nazi Party Jan. 1923 Hitler was named as the Chancellor of Germany. As leader he… Banned all other political parties Had all his political opponents arrested or killed by the SS SS: Hitler’s protection squad that wore all black

Rebuilding Germany With the Nazis in charge of businesses and the economy, many Germans went back to work! Unemployment went from 6 million to 1.5 million!

Rebuilding America 1932 was the first election year after the Great Depression had begun. President Franklin D. Roosevelt was elected to office. He created a program of reform projects called The New Deal. The New Deal: FDR’s large public works program that helped provide jobs to the unemployed Americans.

The New Deal It spent large amounts of money on welfare and relief programs. It reformed the stock market and the banking system. IT WAS A SLOW CHANGE BUT The New Deal did eventually revive America’s economy and faith in Democracy.