1. Years Between the Wars 1919-1939 Main Ideas: 1) Political views can be changed by economic problems. 2) The views of leaders can influence the political, social, and economic direction of society.

2. Problems for Germany Germany suffered from the effects of the Treaty of Versailles (1919): 1) 2) 3) 4) Germany’s new democratic gov’t, the Weimar Republic, had problems: 1)Germans not used to democracy 2)Made decisions slowly (many political parties) 3)Unpopular because it signed Treaty of Versailles

3. Inflation and Reparations Inflation: a sharp rise in the cost of goods 1)To pay for WWI, most countries raised taxes. Germany just printed more money. (“Marks”) 2)After Germany lost, the mark lost its value. 3) After WWI, had to pay reparations to Britain and France, so Germany printed more $$. 4) By 1923, a loaf of bread in Germany cost 200 billion marks!!!  Blamed Weimar Republic

4. INFLATION=diluting the $$$ supply Paper $$$ (Deutschmark) backed by gold (50 dm=1 oz.) Weimar gov’t printed more Deutschmarks to pay reparations to Allies Now takes more Deutschmarks to get 1 oz. of gold (value of deutchmark is diluted)

7. USA Helps Out After WWI, USA richer than before the war! Dawes Plan (1924): US banks loan Germany $200 million Effects: 1)Inflation went away 2)More US companies invested in Germany 3)By 1929, German factories back to pre-war production levels

8. Peace Treaties Treaty of Locarno (1925): Germany, France, Britain, Belgium, Italy 1)Germany and France: “no more war” promise 2)Germany’s promise: respect borders of France & Belgium 3)Germany admitted into League of Nations Kellogg-Briand Pact (1928): USA, France, 14 other nations “No more war” promise BOTH TREATIES: League of Nations had no way to enforce them!!!

9. US Stock Market Crash USA banks and factories supported Europe 1920s, so stock in those companies rose all through 1920s PROBLEMS: Margin Buying: people bought stocks without paying full price, would pay back after stock rose in value When Europe got better, bought less from USA  US factories laid off workers Workers lost jobs, so they didn’t buy as many products  More layoffs, companies out of business 1929 Stock Market Crash: Stock prices began to decrease, so people began to sell their stocks, which just made stock prices decrease more!!! NO $$$!

10. THE CRASH 1929

11. The Great Depression 1929 Stock Market Crash led to chain reaction that ruined US economy 25% of US workers could not find a job (1 out of every 4) Banks lost 9 million people’s life savings The Great Depression began as US banks failed

12. Dealing with the Depression: DEMOCRACIES France: Communists joined in a coalition government with other parties, passed reforms for workers Britain: elected coalition government, passed reforms to help industrial production Scandinavian Countries: Raised taxes to pay for programs to help those in need USA: FDR created government programs to create jobs & fix problems with U.S. economy

13. FASCISM Italy: Communists gained popularity during Depression Benito Mussolini: led a “March on Rome” to claim leadership of Italy, vowed to prevent Communist revolution Germany: Weimar Republic government blamed for economic problems, no clear leadership (too many political parties) Adolf Hitler: Nazi Party elected to protect against Communist revolution