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A Global Depression. 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

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unstable governments weak democracies
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
The Roaring 20’s
  • Fun times reigned
    • Dancing
    • Flappers
    • Drinking
german inflation attempts to stabilize
German Inflation/Attempts to Stabilize
  • War Debt
  • Inflation=Cost more than it’s worth.
  • The new concept of “credit”  people didn’t have $, but they were spending
  • Germany prints own money=WORTHLESS!
  • Loans from the U.S.

Continue to next slide 

continued why was this bad
Continued  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
Efforts At A Lasting Peace
  • Treaty of Versailles – Good start but weak no enforcement
  • Germany signed peace treaty w/ France  Kellogg-Briand Pact
  • Many nations renounced war (not U.S)
  • League of Nations = FAILED
  • We didn’t join!
flawed u s economy
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 $
  • Banks closing!
stock market crash global depression
Stock Market Crash & Global Depression
  • People buying stocks on margin (credit)
  • 1929: Stock Market Crashes: Banks, Margins, BAD loans, back loans
  • Tariffs: stop buying each other’s goods; world trade drops 65%
  • European banks = NO $
  • Can no longer support Mandates (colonies)
  • MAIN CAUSE  closing of banks
the stock market
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
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

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
  • 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
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 to help the depression.
    • 1932: Franklin Roosevelt elected & starts New Deal, brings $ to U.S. & creates jobs
  • When he was inaugurated unemployment had increased by 7 million.
  • Poor sections (like Harlem) had 50% of the population unemployed
  • Created the “New Deal”

The End