The Great Depression Chapter 28 (2 of 4)

WW1 Ends, But Financial Problems Begin

Hyper-Inflation Major inflation (rise in prices, decrease in money value) occurred in Europe after WWI, especially in Germany Inflation began largely because more money was printed to cover reparation payments Soon an inflationary mentality set in. Merchants would raise prices automatically. People would hoard goods, figuring the price would go up, thus causing shortages. September, 1922 September, 1923 November, marks1.5 million marks 200 billion marks Price of a loaf of bread in Germany

Britain relied on exports and was slow to recover due to new competition

Farmer Problems Overproduction from World War I Result = Prices go down Many give up farming and move to urban centers Overproduction from World War I Result = Prices go down Many give up farming and move to urban centers

Colonies Suffering Relied on export crops, but prices down Less money to buy goods so Europe hurt too Relied on export crops, but prices down Less money to buy goods so Europe hurt too

Governments React – Protective Tariffs

Black Tuesday – October 29, 1929 U.S. Stock Market Crashed Great Depression Begins

Banks Fail

Soviets Isolated From Depression State ran economy Didn’t trade with others

Japan Hit Hard Relied on Exports Luxury goods like silk not wanted Grows more untrustworthy of West and continued to expand

Welfare States Rise in the West (example: New Deal in U.S.)