1. The 1930’s: Between the Wars

2.  Great Depression originated here with the stock market crash on October 24, 1929 (Black Thursday. Or Tuesday. Or Monday.)  Severe drought in 1930 caused further economic damage to the agricultural industry  Central banking gave loans they shouldn’t have, people panicked and withdrew savings, banks closed  Devaluation of the American Dollar led to the end of the Gold Standard, changing to a fiat currency (money that exists because an authority or custom declares it to be money)  Unemployment rate reached 25%

3.  International trade plunged 2/3  Cities dependent on industry were hit hard  Crop prices dropped 60%  Most countries underwent government run relief reforms  Most countries moved politically to the right or left in search of a better structure (FDR, Hitler, Stalin, etc.)

4.  Economic decline had been coming for awhile, but the NYSE crash was the final catalyst as many wealthy Europeans had invested in it  Credit structure collapsed in 1931, withdrawing loans from U.S., further damaging them  Several countries turned to leaders that promised better times and a change, even if their ideas were radical  Suffered low wages, unemployment, growing dependence on military production (Germany)  Forced colonies to buy only European products  ½ German population lived in poverty

5.  Depended on rubber and tin trade with the West (automobile industry)  Companies in Asia had much less profit because of lack of sales  Japan lost money on silk production as synthetic fabrics were invented  Japanese exports dropped 50%  Bad harvests and unemployment  India created import duties and stayed level  Results: suspicion of West increased, Japan tried to seek more Asian markets

6.  Had a strong economic tie to the U.S.  According to a League of Nations report at the time, Chile, Peru, and Bolivia were the hardest hit countries in the world  Fascist governments rose in popularity as a result, particularly in Brazil  Industrialization began finally in Brazil only  Many colonial areas depended on the sale of their agricultural exports to afford industrial imports, but couldn’t any longer  Results: greater state planning in economy, new political ideas imitating dictatorships in Europe

7.  The Depression directly contradicted the attitude of the 1900s that prosperity was forward moving progress (CCOT)  It challenged the idea that democracies could control their countries and always be successful  Interrupted industrialization, except…industrialization

8.  The Soviet Union was busy industrializing, collectivizing, communizing…  Genocide under Stalin “cleansed” the lazy, the unwilling, the doubtful, and those related to them  Also Southern Africa prospered as gold became more important (before dropping the gold standard)