1. The Interwar Period

2. The helmet says “Hitler Party”
Do now
Explain the meaning of the political cartoon.
The helmet says “Hitler Party”

3. Do now Take out a sheet of paper Do not use your notes
What were the terms of the Treaty of Versailles? R: A: 1 2 3 4 W:

4. Objectives
Identify the weaknesses that appeared in the global economy during the postwar era.
Describe how the Great Depression occurred and its impact on the world
Describe how Benito Mussolini transformed Italy into a fascist state
Explain why the Weimar Republic failed
Trace how Adolf Hitler became an important figure in Germany
Describe how the Nazis used power in Germany

5. Post WWI
The period between WWI and WWII was known as the Interwar Years
Following the War, EVERY major European country was left nearly bankrupt.
Only 2 countries came out prosperous: The US and Japan. WHY?
European countries got loans from the US.

6. Who is in charge in Democracies? Why was change difficult?
Post WWI
Governments changed from Empires to Democracies- difficult change
An empire consists of several countries and controlled by an emperor (i.e. Holy Roman Empire, German Empire, Ottoman Empire, Austria-Hungarian Empire)
Who is in charge in Democracies?
Why was change difficult?

7. Why America faired Better than Europe
Americans had fought in the war for less than a year
The Atlantic Ocean separated the US from the battle fields
No American land had been devastated

8. Identify the economic flaws that existed in the U. S
Identify the economic flaws that existed in the U.S. during in the 1920s?

9. The economic flaws that existed in the 1920s (Exam Question)
Large personal debt due to loans
Buying items on credit
Economic Nationalism (protectionism)
High tariffs raised prices and cut world trade.
Weakened the world economy
Market Speculation
People were buying stocks on margin (borrowing money and putting 10% down on the stock)

10. Buying Stock on Margin
On Margin: The act of investors borrowing money to buy stocks using only the value of the stock or its expected profit as security (10 % down)
If the stock went up, the investor would sell the stock, pay back the loan and keep the profits

11. The Problem with Buying Stocks On Margin
If the value of stock fell, investors had no means to repay the original amount borrowed, and the lender had no way to recover the money

12. The Problem with Buying Stocks On Margin
Banks would charge 10-15% interest
Markets would have to rise 10-15% to make a break even
Resulted in an uneasy atmosphere as investors worried about how much the inflated value of stocks could rise

15. Germany

16. Weimar Republic- Germany
1919- was organized (Formed at the end of WWI.)
Weak democratic tradition (Controlled by an emperor/part of an empire)
For years Germany was told that they were winning the war and suddenly were told that they lost the war, had a new government and forced to sign an Armistice.
November 11, 1918

17. Weimar Republic- Germany
People of Germany blamed the Weimar Republic for their economic problems as well as being involved in the signing of the Armistice/Treaty of Versailles

18. Weimar Republic- Germany
People of Germany called them “November Criminals”
 German politicians (Weimar Republic) who negotiated and signed the armistice which ended World War I
Also included bankers/big business owners/Jews
Armistice signed November 11, 1918

19. November Criminals

20. Weimar Republic- Germany
Germany blamed the Weimar Republic for signing the Armistice/Treaty of Versailles.
Were they really at fault for signing the Armistice/Treaty?
What would have happened to Germany if they refused?

21. Inflation INFLATION Large reparations leads to the printing of more $
The government was printing more money to pay debt.
Money becomes worthless
Large reparations leads to the printing of more $
INFLATION

22. Inflation
Example: in 1918 a loaf of bread cost less than a mark (German dollar)
1922- it cost 160 Marks, and 200 BILLION by 1923.
People took wheelbarrows of $ to buy food.

23. Take over of the Ruhr Valley
German could not pay reparation
January 1923: French and Belgian troops occupied the Ruhr, the industrial region of Germany in the Ruhr valley, to ensure reparations payments
Workers in the Ruhr went on a general strike.
German government print more money 

24. Hyperinflation
The invasion of the Ruhr caused mere inflation to escalate into hyperinflation.
extreme or excessive inflation
August 1922 and November 1923 (in the aftermath of first World War) during which prices rose at an average rate of 322% per month, and sometimes doubled or even tripled in a single day.
Image © Weimar Archive/Mary Evans Picture Library
A German man holds up a sign saying ‘I will take on any work of any type immediately.’
Unemployment rose.

25. Hyperinflation
Prices in Germany rose so fast that people could barely keep up. Workers had to be paid twice a day and given half-hour breaks so that they could spend their wages before they became worthless.
Image © Weimar Archive/Mary Evans Picture Library
A German man holds up a sign saying ‘I will take on any work of any type immediately.’
Bread price: 4.60 million marks

26. People’s savings were completely wiped out.
Hyperinflation
People had to carry their money around in wheelbarrows and laundry baskets. Shops had to resort to measuring notes by weight, as counting them took too long.
Image © Weimar Archive/Mary Evans Picture Library
A German man holds up a sign saying ‘I will take on any work of any type immediately.’
People’s savings were completely wiped out.

27. Weimar Republic hyperinflation value of the Mark goes from one paper Mark/gold Mark to one trillion paper Marks/gold Mark.

28. A 50,000,000 (50-million) mark banknote from 1923

29. Germany, 1923: banknotes had lost so much value that they were used as wallpaper

30. Postage stamps of Weimar Germany during the hyperinflation period of early 1920s
A 1/2 Million Mark Notgeld coin from 1923 issued by the city of Hamburg, Germany

33. Cash being transported to pay salaries

35. Two men sell paper money by weight.
Hyperinflation
Two men sell paper money by weight.
Their sign indicates that money is worth more than bones, but less than rags.
Image © Weimar Archive/Mary Evans Picture Library

36. Kids stacking money-
Money was worthless. People burned it for heat.

38. Impact of Hyperinflation on Germany
High unemployment
Value of the German mark plummets
1914 (start of WWI)- Four German marks to one US dollar
1919 (end of WWI)- 9 marks to 1 dollar
to 1
January ,000 to 1
June ,000 to 1
August million to 1

39. Example of Hyperinflation
A man drank two cups of coffee at 5,000 marks each, only to be presented with a bill for 14,000. When he asked why this was he was told he should have ordered the coffees at the same time because the price had gone up in between. 

40. Price of Bread 1922, a loaf of bread cost 163 marks.
By September 1923, during hyperinflation, the price crawled up to 1,500,000 (1 million 500 thousand) marks and at the peak of hyperinflation,
November 1923, a loaf of bread costs 200,000,000,000 (two hundred billion) marks.
1000 billion mark note

41. Impact of Hyperinflation on Germany
Savings are wiped out
Cost of a newspaper cost one billion marks
The average wage earner earned enough in one day to by a pound of butter
Wide spread poverty/ starvation/ disease/crime

42. Impact of Hyperinflation on Germany
Germany could not repay reparations
Allies wanted payment in gold or foreign currency
Germany pays in resources (coal/lumber etc.)
When France and Belgium took over the Ruhr Valley Germany did not have access to resources as well as coal to run its factories/heat its homes

43. Impact of Hyperinflation on Germany
Dawes Plan of 1924 (international rescue program) helped Germany to recover and eventually prosper for the next 5 years
US loans Germany $200 million

44. The GreAT dEPRESSION

45. The Great Depression
The World’s economy was dependent on the US economic prosperity.
1920’s- Roaring 20’s- US producing ½ of worlds industrial goods.
Wall Street in NY financial capital of the world.
Booming US Economy led to High stock prices

46. Stock Market Crashes.
Middle- income Americans bought stocks on margin--- they paid a small percentage (10%) of a stock’s price as a down payment and borrowed the rest from a stockbroker.
If stocks rise they sell it pay back the loan and make a profit, but if they fall…

47. The Great Depression October 29, 1929 the Stock Market crashes
was known as Black Tuesday.
Prices of stocks plunge
16 Million stocks were sold—and the market collapsed.
The collapse of the N. Y. Stock Exchange marked the beginning a world wide depression called The Great Depression

50. Effects Factory production cut in half 1000’s of businesses failed
Banks closed
9 million people lost all of the $ in the savings
Many farmers lost their land
By 1933, ¼ of all Americans had no jobs.

52. Shanty Town- where homeless lived

54. Children Playing in the Street

55. Breadline

56. A Global Depression
Germany and Austria hit hard because of their dependence on American loans
Japanese economy also slumped
Fell heavily on Latin America
Hit Britain severely- passed protective tariffs, increased taxes, and regulated the currency, lowered interest rates to encourage industrial growth.—Slow steady recovery.
FDR- the New Deal-

57. Germany
After the Wall Street Crash, America gave Germany 90 days to start to re-pay money loaned to her.
No other world power had the money to give Germany cash injections.
Companies throughout Germany - though primarily in the industrial zones such as the Ruhr - went bankrupt and workers were laid off in their millions.

58. Unemployment in Germany
September ,000 unemployed
September ,320,000 unemployed
September ,000,000 unemployed
September ,350,000 unemployed
September ,102,000 unemployed
January ,100,000 unemployed

59. A Global Depression Effect of the Great Depression
Germany’s ability to pay reparations
Germany stopped paying reparations
The repayment of debts to the US
The Allied Powers ceased payments to the US

60. Reparation
European countries depended on Germany’s reparation payment to help their economy and rebuilt their country
What happened to their economy?
U.S. loaned money to the Germans to make reparation payments. Germans can’t repay the loans
What is the effect on the United States?

61. Rise of the Extreme Political Parties
With no obvious end to their plight under the Weimar regime, those who saw no end to their troubles turned to the more extreme political parties in Germany - the Nazi and Communist Parties
Leads to the rise Adolf Hitler and the Nazi Party