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This text explores the global depression and its impact on unstable governments and weak democracies. It discusses the economic instability in Germany, the Treaty of Versailles, flawed U.S. economy, the stock market crash, and the effects on the people.
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Unstable Governments &Weak Democracies • Fall of Kingdoms/Empires new democracies in Europe. • Ruled by others for centuries: don’t know how to rule themselves. • Frequent changes in government = instability • 1919 Weimer Republic: Germany’s gov’t with a lot of weaknesses.
The Roaring 20’s • Fun times reigned • Dancing • Flappers • Drinking
German Inflation/Economic Instability • War Debt • Inflation=Cost more than it’s worth. • The new concept of “credit” people didn’t have $ they were spending • Germany prints own money=WORTHLES! • Loans from the U.S.
Why was this bad? • Credit system • People didn’t really have the money they were spending • WWI • The U.S. was a major credit loaner to other nations in need • Many of these nations could not pay us back
Efforts At A Lasting Peace • Treaty of Versilles – Good start but weak no enforcement • Many nations renounced war (not U.S) • League of Nations = FAILED • We didn’t join!
Flawed U.S. Economy • Europe’s lands = Trashed by war • Good for U.S. factories = 50% industrial goods produced at home • Uneven wealth: $ goes to factory owners NOT workers • Farms: produce too much food lose $
Stock Market Crash & Global Depression • Countries start asking for payment on loans = the can’t • 1929: Stock Market Crashes: Banks, Margins, BAD loans, back loans • Tariffs: stop buying each other’s goods • European banks = NO $ • Can no longer support Mandates (colonies)
The Stock Market • People bought stocks on margins • If a stock is $100 you can pay $10 now and the rest later when the stock rose • Stocks fall • Now the person has less than $100 and no money to pay back
And then…. • With people panicking about their money investors tried to sell their stocks • This leads to a huge decline in stocks • Stocks were worthless now • People who bought on “margins” now could not pay • Investors were average people that were now broke
What about the people? • Farmers were already feeling the effects • Prices of crops went down • Many farms foreclosed • People could not afford luxuries • Factories shut down • Businesses went out • Banks could not pay out money • People could not pay their taxes • Schools shut down due to lack of funds • Many families became homeless and had to live in shanties
People in cities would wait in line for bread to bring to their family.
Some families were forced to relocate because they had no money.
“Hooverville” • Some families were forced to live in shanty towns • A grouping of shacks and tents in vacant lots • They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.
The World Responds • Britain: Very industrial, depression hit hard. • High tariffs; increased taxes; regulated $, led to slow recovery. • France: self-sufficient, agriculture economy, less foreign trade = weak depression • Socialist govt’s=heavy govt. involvement & taxes (still today) = no depression • United States: • Hoover: did nothing top help the depression. • 1932: FDR New Deal, brings $ to U.S. & creates jobs
President Hoover • Herbert Hoover was president at the start • Philosophy: We’ll make it! • What He Did: Nothing • The poor were looking for help and no ideas on how to correct or help were coming
*FDR* • When he was inaugurated unemployment had increased by 7 million. • Poor sections (like Harlem) had 50% of the pop. unemployed • Instated the “New Deal” • Yea! Frankie!
