1. 1920s & 1930s

2. I. Underlying Problems in the 1920s
Declining demand and overproduction occurred in every major nation
Main causes of the Great Depression
US agriculture collapsed
Germany had hyperinflation
Prices skyrocket
1 lb of bread cost 3 billion on Nov 1st, 1923
1 lb of bread cost 80 billion on Nov 15th, 1923*

3. I. Underlying Problems in the 1920s
Most countries had a bad economic cycle start
Workers stop buying goods
Company make less
Company lays off workers
More workers buy less goods
Company makes less
Company lays off more workers
And on and on and on…

4. II. Stock Market Stocks could be bought on margin
Investors could borrow using the stock they owned to buy more stock
You have to pay back the loan no matter what
Speculation led to inflated stock values and the crash
Lots of sellers in October of 1929*

5. II. Stock Market Firms began to call in margin loans
Investors had to sell at low prices to pay back loans
Stock prices plunge
“Black Tuesday” October 29, 1929, the bottom fell out
WAS NOT THE CAUSE OF THE GREAT DEPRESSION!!!*

6. III. Deeper in debt Federal Reserve raised interest rates
If the Fed had lowered interest rates, the Depression MIGHT have been easier
US passed Hawley-Smoot Tariff in 1930
Makes other countries stop buying US goods and place their own tariffs
Less trading occurs when more was needed*

7. III. Deeper in debt Unemployment rate reached 25% in the US
Those with jobs have wages cut
Demand drops farther
Runs on banks
People go to the bank to get their money out
People who are late get no money b/c it is already gone*

8. IV. Turn around
Franklin D. Roosevelt (D) of New York is elected in 1932
FDR immediately starts Relief, Recovery, & Reform measures known as the New Deal
New Deal helped alleviate the suffering but it DID NOT end the Depression
Massive spending on WWII ended it*

9. IV. Turn around In Great Britain a multi-party gov’t took over
Slowly improved the economy and lowered unemployment
Production was up by 1937
In France, they went through several gov’ts
Coalition gov’t lowered unemployment, but companies raised prices to cover cost of wages
France continued to struggle*