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