1. A Global Depression

2. Europe after the War Every major European country nearly bankrupt United States & Japan in better shape then before the war Europe’s domination in world affairs had declined

3. New Democracies are Unstable Last absolute rulers are overthrown New democracies had little experience with representative government Dozens of political parties form – Impossible for one party to win enough support to govern effectively Coalition government: temporary alliance of several parties – Seldom lasted long – Made it hard for strong leadership to form or move toward long term goals – Major problem during times of crisis

4. Problems in Germany Weimer Republic: Germany’s new democratic gov. Serious weakness – Lacked strong democratic tradition – Several major political parties and many minor ones – German people blamed Republic of country’s defeat & post-war humiliation…they signed the Treaty of Versailles

5. Germany faced serious economic problems – Did not increase wartime taxes to pay for war, instead printed more money – Had to pay reparations to Allies, so they printed more money – Severe inflation set in – Needed more and more money to buy basic goods

6. The Dawes Plan – Provided a $200 million loan from American banks to stabilize German currency & strengthen its economy – Set a more realistic schedule for Germany’s reparations payments – It helped slow inflation & Germany began to recover

7. Roaring 20s An age of dramatic social and political change More Americans lived in cities than on farms Consumer society – American consumers soon began buying mass- produced goods Ford’s Model T automobile Electric appliances: vacuum cleaner, refrigerator, toaster Movies Radios The “New Woman” Flappers Allowed to vote: 19 th amendment Women in the workforce Jazz age Prohibition: 18 th amendment Led to bootleggers, speakeasies, organized crime figures

12. The Great Depression Weakness in U.S. economy caused serious problems – Uneven distribution of wealth – Overproduction by business and agriculture – Lessening demand for consumer goods

13. The Stock Market Crashes Wall Street was the financial capital of the world The booming U.S. economy showed in soaring stock prices Middle income people began buying stocks on margin Worked well as long as prices rose, if they fell investors had no money to pay of loan

14. Stock Market Crash on Oct. 29 1929 in New York started a chain reaction that sent the world into the Great Depression Prices unnaturally high, people started selling off stocks Lowering of stock prices caused a panic and people wanted to sell U.S. investors withdrew even more funds from Germany and other European markets People who lost all their money in the stock market stopped spending Banks and investors started to recall loans which people could not pay

16. A global depression Investors withdrew their money from Europe Congress placed high tariffs on imported goods trying to force Americans to buy American goods Countries who depended on exporting goods to the U.S. suffered World trade dropped Unemployment rates soared

17. The depression challenged democratic political systems in Europe & the U.S. Britain formed a coalition National Government that preserves democracy In France, the depression contributes to political instability, but they were better off then other countries because they were heavily agricultural then relying on foreign trade In Scandinavia, socialist governments build successful recovery programs based on cooperative community action Roosevelt in the United States creates reform programs

18. U.S. government President Herbert Hoover had the distinction of stepping into the White House then less than seven months, the worst depression in America began The Depression was not Hoover’s fault, but as the country slipped deeper and deeper into the depression he would receive great blame Hoover believed that gov. aid would stifle initiative and create dependency where individual effort was needed. He failed to grasp the scope of the depression

20. 1932 Electoral College Votes

21. Franklin D. Roosevelt elected President promising “a new deal for the American people” He acted swiftly to try and stabilize the economy and provide jobs and relief to those suffering by implementing a massive gov. spending program He pursued a policy of active government intervention in the economy known as the New Deal, which included – Ending prohibition – Urged Americans to put their savings back into the banks – Increased public works Works Progress Admin. To provide jobs to the unemployed – Welfare System – Social Security – Insurance and federal agricultural subsidies Did not end Depression U.S. does not fully recover until WWII Recovery in the United States

24. Although the New Deal improved economic conditions, full recovery did not occur until 1942 after the United States entered WWII. At that time, production of war materials led to almost full employment for Americans