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The Worldwide Great Depression

The Worldwide Great Depression. From Boom to Bust. Conditions after World War I. Economic Problems in Europe Severe damage caused by World War I Reparations forced on Germany High expense of rebuilding after World War I Transition of soldiers returning to the workforce

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The Worldwide Great Depression

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  1. The Worldwide Great Depression From Boom to Bust

  2. Conditions after World War I • Economic Problems in Europe • Severe damage caused by World War I • Reparations forced on Germany • High expense of rebuilding after World War I • Transition of soldiers returning to the workforce • Some workers being replaced by soldiers • Wartime spending had stretched nations financially • A rise in unemployment • German economic weakness affects trade and • production in Western Europe

  3. Conditions after World War I • Economic conditions in America • US economy experiences artificial boom in 1920s • Companies continued to produce a high volume of • goods expecting trade with Allies to continue • US farmers were in a depression due to loss of • European markets (Allied armies) • Wages of industrial workers remained low • Americans started buying items on the installment • plan (credit) • Americans invested heavily in the stock market

  4. The Crash Causes • Increased buying of stocks leads to rapid rise in • stock values. (easy money) • When sales of American goods to European markets • slowed, companies experienced a surplus of goods • The surplus continued to increase, investors sell • stocks, and stock values decline • This caused a massive sell off of stocks and a run on • banks to get money to pay creditors/stockbrokers • The Stock Market crashes on Black Tuesday • 10/29/29

  5. The Depression Spreads Causes • The US had emerged from the chaos of WWI as the world’s creditor. Germany and other countries relied on US loans. • The US started “calling in” loans from European countries as our “depression” worsened • European economies began to suffer as the US stopped loaning them money • Due to the depressed state of the US /European economies, investments in South America, Africa, and Asia decreased • The economies on the above continents begin to suffer • By the early 1930s the “Depression” is worldwide

  6. Ticket Out What two things related to Germany caused economic difficulties in Europe? How did soldiers returning from WWI add to economic problems in Europe? What caused the surplus of American goods prior to the Stock Market Crash? The Depression had spread worldwide by approximately what time frame? What country had emerged as the world’s creditor after WWI? Why were US farmer s in a “depression” after WWI? What slowed investment in the continents of Asia, Africa, and South America? What led to a rapid rise in stock values in America prior to the “Crash”? How did the US add to the “Depression” in other countries? Why did the US continue to produce a high volume of goods after WWI?

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