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Global Depression.

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Presentation on theme: "Global Depression."— Presentation transcript:

1 Global Depression

2 Treaty of Versailles France wanted to punish Germany.
Created the League of Nations Germany lost territory Set limits and restrictions to Germany’s military. “War Guilt”—Germany bore the sole responsibility for causing WWI.

3 Weimar Republic 1919, Germany’s government collapsed (Treaty of Versailles) New German Republic founded at Weimar

4 Attempts were made to take over the government by the…
Communists NAZI party Weimar Republic is unpopular with most Germans because… It signed Treaty of Versailles

5 Problems in Germany Hyperinflation caused by war reparations
The Mark was now worth 1 trillionth of its original value AND 40% unemployment Example Cost of Bread in Germany Mark (roughly $1) Marks ,000,000,000 Marks

6 Dawes Plan—1924 A plan to help slow inflation in Germany
$200 million loan was given to Germany from American banks NOT the U.S. Government Led by American banker Charles Dawes

7 Kellogg-Briand Pact A treaty sponsored by U.S. Sec. of State Frank Kellogg and France’s Briand Pledged to: “renounce war as an instrument of national policy” Signed by almost all of the world countries (including Germany, Soviet Union, and Japan)

8 Wall Street Wall Street was financial capital of the world
More or less, still is Optimism about economy caused stock prices to keep rising Middle-class Americans wanted in on action so they purchased stock “on margin” Only paid down payment on stock and borrowed rest from stockbroker

9 Great Depression World depended on U.S. to have a strong economy
3 Problems with U.S. economy leading to the Stock Market Crash: Uneven distribution of wealth Most Americans too poor to buy goods they manufactured Overproduction by business and agriculture Drove prices down Lessening demand for consumer goods Too much wealth concentrated at the top (top 5% earned 33% of wages

10 Black Tuesday: October 29, 1929
Stocks went through the roof…people saw this and SOLD, SOLD, SOLD…Result Stock values plummeted 10/29/1929…stock market crashed People who purchased on margin who want to sell their stocks now owe money to the stockbrokers they borrowed from People went to the bank to withdraw money to pay the brokers. Result…Banks ran out of money Result…Banks failed and people lost all their money they had saved at the bank Result…People have no money, they can’t buy manufactured goods. Result…People can’t buy manufactured goods, factories shut down Result…Factories shut down, people lose their jobs Result…Massive unemployment—Over 30%

11 Great Depression Countries reduced the amount of trade with other countries Placed high tariffs on imported goods American bankers withdrew money from Europe Severely damaged European economies Turned into a global depression

12 Recovery in the U.S. FDR elected in 1932—How he helped… New Deal
large public works project designed to provide jobs Instituted welfare and relief programs Placed federal regulations on the… Stock Market—Securities and Exchange Commission Banks—FDIC insurance


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