1. Post War Economics Britain & France owed huge war debts to the U.S.
Both relied on reparation payments from Germany to pay back loans
Crushing reparations ($30 billion / $2.7 trillion today) devastated Germany’s economy

3. The United States Booms
U.S. emerges from WWI as world’s leading economic power
When American economy prospers = global economy remains stable = prosperity
BUT …… prosperity did NOT last!

4. Wealth in U.S. not shared evenly
Demand fell & prices dwindled after war
Workers earned less = they bought less
Demand slows = factories produce less = workers lose jobs
Unemployment rates reach almost 25%

5. Crash and Collapse Crisis in FINANCE was happening
Many acquired stocks through risky measures
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Federal Reserve tried to slow this down, but it backfired……people were worried about borrowing & investing!

6. Crash and Collapse The Great Depression had begun
Autumn Jitters caused many people to sell all their stocks at once
PANIC set in!!!!
"Black Tuesday", October 29, 1929, Stock prices CRASHED!!!
Wiped out fortunes for many investors - run on banks – most lost everything.. All their savings
The Great Depression had begun

8. The Great Depression = a painful time of global economic collapse
People bought & invested even less
Businesses & banks failed
Jobless could not buy goods = more factories close = ever increased unemployment
Vicious cycle!!!!

9. People slept on park benches & in the street - lined up to eat at soup kitchens

10. Depression quickly spread around the world
American banks stopped making loans abroad & demanded repayment of foreign loans
No U.S. support = Germany suffers
Germany couldn’t make reparation payments = France & Britain can’t make their loan payments to U.S.

11. Great Depression spread misery from industrial world to Latin America, Africa & Asia – The Entire World

12. By mid-1930s France had decreased production = high unemployment
By 1931 one in every four British workers were unemployed
By mid-1930s France had decreased production = high unemployment

13. Roosevelt Offers the United States a New Deal
1932 – President Franklin D. Roosevelt introduced the new deal
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NEW DEAL –
a massive package of economic & social programs
Government takes active role in combating the Great Depression

14. Under the New Deal:
Federal government more directly involved in peoples’ lives
Laws regulated stock market & protected bank deposits (FDIC)
Government programs created jobs & gave aid to farmers
New Social Security system protected pensions for the elderly & other benefits

15. Just as New Deal took effect – Natural Disaster --- THE DUST BOWL --- hits central states
Many years of drought, over-farming & huge winds across the central plains
Winds picked up & carried away the topsoil exposed by erosion – creating the DUST BOWL
Storms destroyed crops, land, equipment.
Farmers lose their land – became homeless – migrated to cities in West – looking for work & new life
Horrible hard times

19. New Deal failed to end the Depression – BUT - it did ease the suffering for many
STILL --- some critics fiercely condemned FDR’s expansion of role in government (some claimed he was a socialist)
The debate about the size & role of the Federal Government continues to this day

20. As Depression Went On……
Many people lost faith in democratic governments to solve problems
Postwar disillusionment turned into despair in Europe
Misery & hopelessness created fertile ground for extremists with radical solutions