1. Great Depression
Background and causes

2. The war is over Europe is in ruins The US and Japan are doing well
Countries are nearly bankrupt
There is a great deal of uncertainty
The US and Japan are doing well
Neither had been a wartime battlefield
Their influence rose after WWI

3. Unstable Democracy New Democracies in Europe
Russia (provisional government)
Germany (Weimar Republic)
Problems lead to instability
No democratic tradition in some countries
France and Italy had many political parties

4. Democracy in Germany Weimar Republic Major problem Created in 1919
1st democracy in Germany
Major problem
Many Germans were angry with the Weimar for signing the Treaty of Versailles

5. Economic Crisis Background Inflation
During the war, Germany printed more money to pay the costs
of the war reparations.
Inflation
Definition: when the value of a currency drops and prices go up
Suddenly, German marks became worthless

6. Attempts at Economic Stability
Dawes Plan
Began in 1924
$200 million in loans from the US to Germany
Designed to stabilize the currency and strengthen the economy
By 1929, Germany had recovered

7. Efforts at a Lasting Peace
Germany in the League of Nations (1925)
France and Germany agree never to fight each other again

8. The ‘Roaring 20s’ Good times ‘A Return to Normalcy’
Easy money: corruption scandals, shady business tycoons, and gangsters
Big Band music, dance clubs
Athletes become major celebrities
‘A Return to Normalcy’
The economy seemed strong
War was a distant memory

9. Flaws in the US Economy Distribution of income Overproduction
A wealthy elite kept most of the profits
Overproduction
Too much production = lower prices
Lower prices = less profit
Unpaid debts
Many farmers could not sell their crops
As a result, banks could not collect debts

10. The Rise of Totalitarianism

11. Desperate Times... Global Economic Depression
Rising unemployment & falling production
Growing inflation destroyed savings
Failure of moderate governments
Many democratic governments were unable to deal with the crisis
Russia (provisional government)
Germany (Weimar Republic)

12. …desperate measures Radical solutions Strong leadership
Many stocks became worthless
Some of the world’s wealthiest people saw their fortunes disappear
Strong leadership
9 million people lost their savings
Many farmers lost their land

13. The Depression Begins Unemployment The Vicious Cycle
Factory production dropped by 50%
Less production meant fewer jobs
By 1933, 25% of Americans and Canadians had no job
The Vicious Cycle
Less money available = fewer purchases
Fewer purchases = less money available

14. Tariffs Affect Global Trade
Definition: fees charged on goods produced in other countries
The US tried to protect its own industries by making imports more expensive
Global Trade drops
Other countries increased their tariffs
Global trade declined by 65%

15. A Global Depression Europe Latin America Asia
Austria’s largest bank failed
Latin America
Many countries could not sell their products
Asia
Crop failures led to famine