1. Understanding the Depression 10.6.2 - Describe the effects of the war and resulting peace treaties on the international economy 3/1/12 Leave a blank page for your new table of contents

2. Economics at the end of World War I After the war, USA strongest economy in the world –50% of world’s industrial production! –Lent $ to UK, France, and Germany Problem: Overproduction –Demand could not keep up with production Factories lay off workers Workers and families purchase less Leads to further business closures and job loss

3. Inflation in Germany Germany has huge war expenses Gov’t spends more than it takes in Ger prints more money Value of money goes down Prices go up Gov’t prints more money Cycle continues Economy is in danger of collapsing

4. Stations: All work goes into your notebook 10.6.2 - Describe the effects of the war and resulting peace treaties on the international economy Station 1: Financial Collapse Grab a textbook and open to page 472. We will be taking analytical notes w/ Mr. H. Station 3: Comparing Global Responses Find the handout in the folder. Follow the directions. Station 2: Test Review Find the your test results in the stack on the computer cart. Grab a copy of the test in the folder. Review the questions you missed. Summarize these question/answers into a sentence each. Station 4: Reasons behind the Worldwide Depression Work together. Follow the directions on the handout provided. Write in complete sentences!

5. DO NOW Grab a textbook. Open to page 472. Read the “History in depth” box. Scan the text on pages 472 - 473. Answer in complete sentences: Why might Americans have been buying less in the years just before the stock market crash? How did margin buying contribute to the stock market crash?

6. A Worldwide Depression WORK TOGETHER and use textbook (p. 470-475) to state REASONS for the following developments Yes, copy them down, 1.In new postwar democracies, there were frequent changes in government 2.In Germany, the Weimer Republic was weak from the start 3.Postwar Germany suffered from severe economic inflation 4.The US had a flawed economy 5.October 29, 1929 the US stock market crashed 6.A long depression followed the crash in the US 7.Collapse of the US economy affected countries worldwide. 8.In Britain, the National Government rescued the economy 9.In France, the Popular Front was formed as a coalition government 10.Socialist gov’ts in Scandinavian countries dealt with the economic crisis successfully

7. A Worldwide Depression 1.In new postwar democracies, there were frequent changes in gov’t Had little experience with representative gov’t; having many political parties made it difficult to reach agreements in gov’t 2.In Ger, the Weimer Republic was weak from the start Lacked a strong democratic tradition; many political parties; ppl blamed Weimer Republic for defeat & Treaty of Versailles 3.Postwar Ger suffered from severe economic inflation Gov’t printed $ for war expenses & reparations; devalued money 4.The US had a flawed economy Uneven distribution of wealth, overproduction of goods and agriculture lessened demand for consumer goods 5.October 29, 1929 the US stock market crashed Investors believed stock prices would drop so they tried to sell high-priced stocks they had bought on margin but no one wanted to buy

8. A Worldwide Depression 6.A long depression followed the crash in the US Unemployment rates rose as production, prices, & wages fell; businesses & banks closed; savings and farms were lost 7.Collapse of the US economy affected countries worldwide. Countries had war debts and depended on US for loans and investments; worried US banks would demand loan repayments; US investors pulled their $ out of Europe; US market for imported goods fell; high tariffs decreased world trade and market demand 8.In Brit, the National Government rescued the economy High protective tariffs, increased taxes, regulated currency, lowered interest rates to encourage industrial growth 9.In France, the Popular Front was formed as a coalition gov’t Economic crisis in France led to political instability & leaders feared growth of antidemocratic forces 10.Socialist gov’ts in Scandinavian countries dealt with the economic crisis successfully Tradition of cooperative community action & gov’t sponsored public works programs kept ppl employed and producing; gave $ to those who needed it

9. Stations: All work goes into your notebook 10.6.2 - Describe the effects of the war and resulting peace treaties on the international economy Station 1: Lecture & Review with Mr. H – “Worldwide Depression” Station 3: Scanning textbook section 15.3 Follow the directions on the handout carefully. Station 2 Primary Source Analysis: Hemingway Work together. Read the primary source (including the introduction). Discuss and answer the questions into your notebook Write in complete sentences! DO NOT write on the handout

10. Postwar Europe –New political realities Unhappy people did not really favor particular parties Coalition gov’ts necessary –Had to give in to workers demands (fight off revolutionaries) –Weimar Republic has trouble Ger ppl unhappy with the Treaty of Versailles War debts helped create inflation Inflation is stopped by Dawes Plan –US banks loaned GER $200 mil –Stabilizes Ger economy A Worldwide Depression Coalition gov’t: temporary alliance of several parties Party: group of people with same political ideas Inflation: value of money goes down & price of goods goes up Stabilize: to make stable, not shaky

11. Great Depression –Apparent in the Stock Market Crash False wealth: people buying stock with borrowed money raised stock prices artificially Eventually falling prices created a panic and then the crash (prices wiped out wealth) –US economy falls & spreads to world Uneven distribution of wealth Surplus of factory & agricultural products Banks and investors took their $ back from Europe Stocks: ownership of a company Distribution of wealth: how wealth is spread between rich and poor Surplus: extra Public works projects: jobs created by the gov’t

12. Reviewing Global Responses CountryResponseEffectiveness BritainCoalition of political parties  enacted tariffs and new taxes Slow recovery, democracy maintained FrancePolitical instability, worker reforms High unemployment, democracy preserved ScandinaviaPublic works projects, welfare, taxes Economic health, democracy preserved United StatesPublic works projects, welfare, economic reform Slow recovery, democracy preserved.