1. A period of low economic activity and rising unemployment.
Global Depression (p 23)
Learning Goal 4: Summarize the international, political and economic causes of the global depression and explain how the US, Germany and the Soviet Union responded to the economic depression. (TEKS/SE’s 11A,B,12B)
Depression:
A period of low economic activity and rising unemployment.

2. Causes of the Global/Great Depression
War Debts in Europe
Financial Crisis
Stock Market Crash
Poor Banking Management &
Lack of Stock Market Regulations
Causes of the Global/Great Depression
Agriculture
High Tariffs (taxes)
Overproduction
Industry

3. Causes of Global/Great Depression
Overproduction
Industrial and farming surpluses  deflation ( supply, demand)
There were many layoffs, which led to higher unemployment
War Debts in Europe
Rebuilding effort + overdependence on American loans for financing WWI made Europe vulnerable to economic crisis in U.S.

4. Stock Market Crash
US Stock Market crashed on Friday, Oct. 25, (Black Friday)
Europe felt effects of crash, as foreign investors lost money
Poor banking management and lack of stock market regulations in the US led to bank failures and loss of credit sources for Europeans
Americans were heavily invested in Europe, but kept pulling out money to play the stock market
W/o ability to borrow, Germany had no money to pay reparations
Bank Runs and subsequent bank failures
"It's A Wonderful Life" Bank Run Scene

6. Stock Market Video
Link

7. United States Response
Passed highest tariffs in history to protect US industries and block international trade
Created modern welfare state with intro. of Social Security & unemployment
Massive government effort made to create jobs through public projects
New Deal – Franklin D. Roosevelt (FDR)
Turned to strong leadership and elected FDR to 4 presidential terms in office

8. Great Depression in GERMANY
Link

9. Germany’s Response Stopped paying WWI reparations
Printed money  hyperinflation
$1 US = 9 German marks
$1 US = 4 billion German marks
Weimar Republic (est. after WWI), blamed for economic problems
By 1933 voters turned to strong leadership in Hitler and the Nazi Party
People who used to be middle class rejected communism
Hitler created employment and promoted nationalism by rebuilding for military effort

12. Soviet Union Response Stalin in power
Saw Great Depression as failure of capitalism
Prior to depression, Russia’s economy less integrated into world sphere and less industrialized
Less affected by Great Depression
Soviet Union’s industrial output increased during depression and provided job opportunities