1. The Great Depression: Post WWI Economic Problems
Ms. Payne
September 21, 2011

2. The Great Depression: Post WWI Economic Problems
SS6H7a
Describe major developments following WWI: the Russian Revolution, the Treaty of Versailles, world- wide depression, and the rise of Nazism

3. The Great Depression: Post WWI Economic Problems
ESSENTIAL QUESTION: How did the Treaty of Versailles and world-wide depression impact Europe in the years between World War I and World War II?

4. Worldwide Depression ISN: Cornell Notes
Definitions: Economic Depression: Inflation: Stock Market Crash:
period of low economic activity when many people lose their jobs
period when money loses it value and businesses raise prices
a sudden dramatic decline of stock prices across a significant cross- section of a stock market, resulting in a significant loss of paper wealth

5. Depression in Germany Factors German Resentment and Humiliation
After the war Germany did not like losing territory and making war payments. The territorial and economic loss caused Germans to have resentment and be humiliated.

6. The Great Depression: Post WWI Economic Problems
Germany
made the 1st of reparation payments in 1921
claimed they could not afford to pay anymore
Germany made the 1st of the reparation payments in 1921
The next year they claim they could not afford to pay anymore.

7. The Great Depression: Post WWI Economic Problems
France’s Response
Use German payments to rebuild their own economy.
Sent troops to take German’s valuable mines and factories
France got used to receiving reparations from Germany. France was using the payments to rebuild their economy. When Germany said they were not able to pay reparations the next year, France sent troops into Ruhr Valley to seize (take) valuable mines and factories that belonged to Germany as payment.

8. The Great Depression: Post WWI Economic Problems
Germany’s Response
workers at factories and mines went on strike  protest France’s takeover.
began printing more money to pay wages
Caused inflation
Value of money ↓
Businesses prices ↑
Result takes more $$$ to buy things.
people needed wheelbarrows full of money to buy a loaf of bread
The workers at these factories and mines went on strike to protest France’s takeover.
To help pay these workers’ wages, Germany began printing more money
This backfired on the Germans causing inflation. Inflation is when money starts to lose its value and businesses raise their prices. The result is that it takes more money to buy things.
Soon, German people had to have wheelbarrows full of money just to buy a loaf of bread.
This German woman is using German paper money to keep her stove going. It was so worthless, the best use was for firewood!

9. The Great Depression: Post WWI Economic Problems
Causes of the Great Depression
Crash of the U.S. stock market
Causes of the Great Depression
Crash of the U.S. stock market
Investors would buy stock with borrowed money. As long as stock prices increased, investors made the money to pay back the loans. HOWEVER, when stock prices decreased, investors were stuck with a loan they could not pay back!

10. The Great Depression: Post WWI Economic Problems
Causes of the Great Depression
Overproduction
Inability to pay back loans
Unemployed
Investors
Banks wanted loans paid back
Banks collapsed many people lost their entire savings.
Causes of the Great Depression
Overproduction
Many factories made too many goods and were not able to sell all they produced.
This forced factories to slow down production and lay off workers.
This created a problem because of the high number of unemployed people.
They could not support themselves.
Inability to pay back loans
Banks started to want loans paid back.
People out of work and investors who did not make a profit in the stock market could not pay back their loans.
Banks collapsed and many people lost their entire savings.

11. The Great Depression: Post WWI Economic Problems
The Great Depression spreads to Europe
American investors pulled their money out of European banks.
The European economy collapsed as well.
Half of Germany’s population was unemployed.

12. Unemployment Rates
The unemployment rate at the date of the stock market crash was less then
about 4% in the U.S.,
about 11 % in Great Britain, and
about 14% in Germany.
By 1932 the rates spiked up to:
about 23% in the U.S.,
about 24% in Great Britain, and
30% in Germany.

13. The Great Depression: Post WWI Economic Problems
Impact
Rise of Nazism & Hitler
With the humiliation of the German people, the huge debt, and the starvation and economic depression in Germany after WWI, it is easy to see why the German people would put their faith in Hitler in a few years.

14. 1931 German Financial Crisis
PBWorks
om/w/page/ /Worldwide %20Depression
YouTube

15. Worldwide Depression ISN: Cornell Notes Causes: Long-Term
Huge debt resulting from WWI
European dependence on American Loans
Widespread of credit
Overproduction of goods paired with a decline in demand

16. Worldwide Depression ISN: Cornell Notes Causes: Short-Term
Stock Market Crash 1929
Banks demand repayment of loans
Americans can no longer give loans to other countries
Businesses and factories fail
High protective tariffs

17. Worldwide Depression ISN: Cornell Notes Effects: Short-term
Vast Unemployment and misery
Bank failures and collapse of credit
Loss of faith in capitalism and democracy
Authoritarian leaders gain support

18. Worldwide Depression ISN: Cornell Notes Effects: Long-term
Nazis take control of Germany
Scapegoats are blamed for economy
Fascist leaders gain control of Eastern Europe
World War II begins

19. ISN: Cornell Notes
Worldwide Depression
Summary: