1. Global Depression
By the late 1920s European nations were rebuilding their war-torn economies with loans from the US.

2. Europe After the War Every major European country was bankrupt
Old forms of government ended - dynasties
New democracies had little experience

3. Weimar Republic 1919 Germany’s new democratic government
Many political parties competed for power
Germans blamed the Weimar government for their defeat and humiliation - WWI

4. Problems in Germany Hyperinflation caused by reparations
The Mark was now worth 1 trillionth of its original value
40% unemployment
Cost of Bread in Germany
Mark
Marks
,000,000,000 Marks

5. Dawes Plan
A 1924 plan to help slow inflation and restart manufacturing in Germany
$200 million loan given to Germany from American banks
Charles Dawes

6. 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)

7. Great Depression World depended on U.S. to have a strong economy
3 Problems with U.S. economy:
Uneven distribution of wealth
60% of families made less than $2000 a year
Overproduction by business and agriculture
Drove prices down
Lessening demand for consumer goods
Most Americans too poor to buy goods they manufactured

8. Wall Street Wall Street was financial capital of the world
Optimism about economy caused stock prices to rise
Middle-class Americans purchased stock on margin
Only paid down payment on stock and borrowed rest from stockbroker

9. Black Tuesday: October 29, 1929
Stocks became unnaturally high causing a selling trend
Prices fell causing more people to sell stocks
Oct 29, 1929 – Black Tuesday – the market collapsed and stocks were worthless

10. Great Depression Unemployment rose Industrial production dropped
Wages dropped
Businesses failed
Banks closed

11. World Reaction US banks demanded repayment of overseas loans
US investors withdrew money from Europe
Congress placed a high tariff on imported goods
Other nations imposed a tariff
World trade dropped
Unemployment soared
Banks failed world-wide
Crops failed → famine and a decline in exports
Latin America could not repay debts

12. Recovery – Great Britain
Voters elected a coalition government
Passed a high protective tariff
Increased taxes
Regulated currency
Lowered interest rates to encourage industry
Encouraged a steady recovery without extremes & preserved democracy

13. Recovery - France
Heavily agriculture and less dependent on foreign trade
Economic crisis → political instability
1936 coalition government passed a series of workers reforms
Pay increases
Holidays with pay
40 hour work week
Preserved democracy

14. Recovery in the U.S. Franklin D Roosevelt elected in 1932
New Deal program created public works projects to provide employment
Financial aid to businesses and farms
Instituted welfare and relief programs
Regulated the stock market and banks

15. Europe Between Wars Communism failed to spread beyond the Soviet Union
Political and economical instability led to dictatorships in Germany, Italy, Spain