I. Worldwide Depression
A. Germany’s Weimar Republic
1. Germans blamed the Weimar Republic for WWI defeat
2. Inflation caused Germans to question the capability of the Republic
Example
Cost of Bread:
1918 - less than 1 mark
1922 - 160 marks
1923 - 200 billion marks
A. Germany’s Weimar Republic
3. Dawes Plan: US banks gave a $200 million loan to stabilize Germany’s economy and set a more realistic payment plan for war reparations.
4. By 1929, Germany’s economy slowly recovered and industrial production increased.
A. Germany’s Weimar Republic
5. The Kellogg-Briand Pact (1928) was signed by almost all countries to “renounce war.” Germany joined the League of Nations, and countries promised to decrease their militaries.
Spoiler alert…it’s not gonna work!
WWII began in 1939…
B. Long-Term Causes of the
Great Depression
1. World economies were connected. Europe relied on US loans and investments.
2. Many countries had huge war debts.
B. Long-Term Causes of the
Great Depression
3. People were buying goods on credit, and investors bought stock on margin.
4. Wealth was unequally distributed.
C. Short-Term Cause: Stock Market Crash
1. The US stock market crashed on Black Tuesday - October 29, 1929.
2. People lost fortunes, the banking system collapsed, and farms and factories closed.
3. Global depression began as the US reduced foreign trade and loans to Europe.
German Unemployment: 1929-1938
The Great Depression
D. Immediate Effects of the Great Depression
1. Businesses went bankrupt, and unemployment increased
2. People lost faith in capitalism and democracy.
3. Some nations turned to authoritarian leaders.
Paris, 1930
London, 1930
E. The World Confronts the Crisis
1. World gov’ts create jobs and welfare programs.
2. In the US, Roosevelt (FDR) launched the New Deal in 1933, which had programs for public works, welfare, and regulations on the banking system and stock market.