2.  America had a lot of money!  Avoided the destruction that Europe experienced during WWI  Made a lot of money helping to rebuild Europe  Made massive loans to France, England & Germany  Why not Soviet Union?  Poised to become a world power  But isolationist urge strong

3.  At the end of WWI, the British Empire was at its greatest extent  They took over Palestine, Iran & Iraq from Ottoman Empire  BUT Britain was dramatically changed  2.6 million casualties  Women entered workforce  Inflation hurt people on fixed incomes

4.  6.97 million casualties  Political desire to avoid another war with Germany, at any cost  “Appeasement Policy”  France didn’t protest when Hitler violated the Versailles Treaty  Built Maginot Line along German-French border  Elaborate system of forts to protect against German attack

5.  Germany’s new government = Weimar Republic  Democratic republic with an elected president and parliament, the Reichstag  Government was blamed for losing WWI and the Versailles Treaty  Economic problems  Couldn’t pay war reparations  In 1923, France occupied Ruhr industrial region  But by 1928, Germany’s economy had recovered to 1913 levels

6.  After WWI, militarism, racism and nationalism became powerful forces in Japan  Began establishing their empire  Korea, 1904-05  German colonies in Pacific, WWI  Manchuria, 1931  China invaded, 1937

7.  Created out of Versailles Treaty  Goals  Disarmament  Prevent war through collective security  Settle disputes diplomatically  League had no military force of its own (Great Powers)  Incapable of preventing aggression, during 1930s  Member states = 44, including UK, France, Italy  But NOT USA

8.  Wages were not keeping up with inflation  Falling crop prices hurt Europe’s recovery  Economic Nationalism  Tariffs were high  That meant European countries couldn’t sell to US, each other  High inflation + high tariffs meant European countries couldn’t afford US goods

9.  Causes  Inflation (prices up)  Wage stagnation  High debt levels of individuals & business (interest payments)  Businesses began to fail = unemployment = less $ being spent = more business fail  International trade declined due to high tariffs  NY Stock Exchange collapsed on 10/29/29 (Black Tuesday)

10.  Worldwide effect  Prices and wages plummeted  Unemployment skyrocketed  Germany stopped payments to allies  European countries stopped interest payments to US  US banks began closing as people demanded money from them

11. AAmerica raised tariffs, cut off Europe from loans BBritish raised tariffs, increased trade within Empire FFrench weren’t as industrialized, so less effect; but political unrest was high GGermany’s Weimar Republic died IInflation made $ worthless; currency was worth more as bulk paper SStrengthened National Socialist German Workers Party (Nazis)

13.  Dictatorships rise to power during the 1920s-1930s  · people are desperate for strong leadership during the Depression  · Treaty of Versailles failed to establish lasting peace  1922 Mussolini establishes fascist dictatorship in Italy  1920s Joseph Stalin's communist dictatorship in the Soviet Union (U.S.S.R.)  1931 Japanese establish militaristic fascist dictatorship  1933 Adolf Hitler fascist dictatorship in Germany (The Third Reich)