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{ World between the Wars Great Depression
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Define the following terms in your notebook Textbook, pg. 904-909 Great Depression Collective Bargaining Dawes Plan (pg. 905) Franklin Delano Roosevelt New Deal Warm-Up
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Origins Set up by Woodrow Wilson to have allies in case of another World War Maintain peace was the main objective Problems U.S. did not join the League of Nations American public did not support it Fall U.S. had no involvement so other countries could not come to agreements; fell apart League of Nations
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Reparation payments started in 1921 for Germany Owed the equivalent of 33 Billion U.S. dollars Paid the first year; unable to pay after that France was upset at inability to pay Took control of German industrial and mining centers Used labor and control of these centers to extract money Financial Crisis
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German workers went on strike, but still demanded salary Germany printed more money Led to extreme inflation (rise in prices) Inflation caused Germany’s currency to become worthless 4.2 Trillion marks=1 U.S. dollar Leads to Great Depression in Europe and U.S. Financial Crisis cont’d.
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Three Main Causes Downturn in the economies of individual nations Prices increased rapidly International financial crisis involving Europe and U.S. U.S. stock market crash Leading to the Great Depression
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U.S. Stock Market was key to Europe’s success after WWI Allied countries, mainly France and Britain, relied on the money that the U.S. was pumping into their economies Stock Market and Economies
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The U.S. Stock Market became a hugely successful business opportunity for investors Investors started pulling money out of Germany’s economy Once this happened, an economic domino theory happened in Europe Stock Market and Economies
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France and Britain rely on U.S. money in Germany U.S. pulls money out of Europe France and Britain can’t support their economy anymore Slowed trade, industry declines, unemployment increases Depression in Europe Depression Hits
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Governments did not known how to handle the shifting economy Solution: Stop all foreign trade and lower wages This only made it worse Supply and Demand were lowered because of decrease in foreign trade, not enough money was coming in from elsewhere Response to Depression
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Increased government activity in the economy Interest in Marxist ideas (Communism, Fascism, Totalitarianism) ‘Capitalism would destroy itself’ People were forced to follow radical/dictatorial leaders who wanted reform Minds were easily swayed due to the publics lack of trust in the government Political Effects
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France, Great Britain, and U.S. all came up with new ideas to deal with the depression France-Collective Bargaining Right to negotiate hours and wages Great Britain-Deficit Spending Fund construction projects to increase jobs Go into debt to come out of debt New Ideas
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U.S.-New Deal Franklin Delano Roosevelt implemented a public works program Construction work to create jobs Welfare system created Social Security Act Slowed depression; did not stop it The Great Depression did not end until the start of World War II New Ideas
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