1. The Great Depression (1929-1939)

2. What was the Great Depression? The Great Depression: a period of very low economic activity and high unemployment that spread throughout the world during the 1930s

3. Economic Boom in the United States The Roaring 20’s  American factories produced most of the world’s manufactured goods  American workers made more money than workers in other countries  Banks in the U.S. loaned other countries large amounts of money

4. Economic Struggles in Europe Most nations were deep in debt after World War I Many countries printed too much money and experienced inflation (money loses value and prices go up) Many European nations relied too much on the U.S. economy

5. Causes of the Great Depression Too much confidence in the economy  Americans borrowed and spent too much  People made careless investments  Factories produced more goods than they could sell

6. The Stock Market Crash of 1929 The economy slowed down  Stock values began to fall  Investors panicked and too many people wanted to sell their stocks Stockbrokers demanded that borrowers pay off loans  People withdrew money from banks to pay off loans  Many banks did not have enough money and had to close Prices dropped further  On October 29, 1929, Black Tuesday, values of stocks “crashed” to record lows

7. Effects of the Great Depression Many banks and factories closed People lost faith in the economy  People bought less and invested less Many people became homeless Unemployment was at an all time high 1/4 Americans and British jobless 2/5 Germans jobless

8. Different Responses to the Great Depression

9. The United States Kept its democratic form of government  Voters gave government more power to deal with depression The New Deal: set of programs started by President Franklin D. Roosevelt that helped bring the U.S. out of the Great Depression  The Social Security Act of 1935 Benefits for retired, disabled, and unemployed  Public building projects Created new jobs  More government involvement in economy Rules and regulations for businesses Assistance for farmers Higher taxes to pay for programs

10. Germany After WWI, Germany set up a democratic government  New government failed to solve economic problems  Germans lost faith in democracy During the Great Depression, Germans wanted a strong leader to help with their economic problems  Adolf Hitler: leader of the Nazi Party and dictator of Germany from 1933-1945 His ideas inspired German people who were suffering under the Great Depression and the Treaty of Versailles Nazism: the political beliefs of the Nazi (National Socialist German Workers’) Party  Promised to build a more powerful Germany  Called for a powerful leader (dictator) to get things done quickly  Blamed Jewish people for Germany’s problems His harsh rule brought Germany out of the depression

12. Great Britain Kept its democratic form of government  Voters elected a new political party to help the economy economic retrenchment: cutting back on other government programs and focusing on economic improvement  More government involvement in the economy Raised tariffs to protect British businesses Cut back money supply to limit inflation Lowered interest rates on loans to encourage spending  Balanced the budget (got the government out of debt) Raised taxes and controlled government spending  Cut military spending – saved money but weakened defense ability