1. The Global Depression
Chapter 15, Section 2

2. Europe After the War Major European countries nearly bankrupt
Only U.S. and Japan in better financial shape
Neither had been a wartime battlefield
War drained the continent’s resources

3. New Democracies Are Unstable
Europe’s last absolute rulers overthrown
First time European’s use democracy
Little experience in representative government
Dozens of political groups
40 changes in governments
Voters sacrifice democracy

4. Weimar Republic Weak 1919, democratic government
Germany lacked strong democratic tradition
Several major political parties
German’s blamed Weimar Government for defeat and humiliation

5. Inflation Causes Crisis in Germany
Did not increase wartime taxes
Printed money to pay war debt
Money lost value
Severe inflation set in
Loaf of bread < 1 Mk 1918, in billion Mk

6. Attempts at Economic Stability
Dawes Plan, $200 million to Germany
Stabilized German currency
Strengthened economy
Realistic schedule for
reparations payments
1929, German factories producing at prewar level

7. Efforts at a Lasting Peace
Gustav Stresemann tried to improve relations w/France
France/Germany treaty promising never to make war again
Germany admitted to League of Nations
Kellogg-Briand pact, almost all countries signed
Renounce war as a national policy
League had no armed forces
U.S. refusal weakened League

8. The Great Depression A Flawed U.S. Economy
Uneven distribution of wealth
Richest 5% received 33% of all person
60% earned less than $2,000
most families unable to buy produced goods
stores cut back orders
Overproduction in business
factories reduce production
laid off workers
fear sets in, less buying, more lost jobs

9. The Stock Market Crashes
Middle income people buy stock on “margin”
Paid small percentage of the stocks price as a down payment
Borrowed the rest from a stockbroker
October 24, panic selling
October 29, 16 million stocks sold, market collapses

10. The Stock Market Crashes
Billions of dollars “paper wealth” vanish
1932, factory production cut in half
Businesses fail and more banks close
1933, 25% of all Americans with no jobs

11. The Global Depression Bankers demand repayment of overseas loans
Withdraw money from Europe
Congress places high tariffs on imports
Other nations impose their own high tariff
World trade drops 65%
Germany and Austria hard hit
1931, Austria’s largest bank fails

12. The World Responds to the Crisis Britain Takes Steps to Improve Its Economy
Multi-party coalition “National Government”
High protective tariffs, increased taxes, regulated the currency
Lowered interest rates, encourages industrial growth
1937, unemployment cut in half
Preserved democracy

13. France Responds to Economic Crisis
Had a self-sufficient economy
Somewhat cushioned against the Depression
But, 1 million French unemployed
5 coalition governments fail
Reforms for workers
Pay increases, holidays w/pay, 40-hour work week

14. Socialist Governments Find Solutions
Denmark, Sweden Norway
Built recovery programs on existing cooperative communities
Public works projects
Improved social benefits

15. Recovery in the United States
1932, FDR elected president
The “New Deal”
Large public works projects
Provided jobs
Government agencies to help businesses and farms
Regulations to reform stock market and banking system
Preserved faith in democratic system