A Global Depression

1. A Global Depression

2. 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.

3. The Roaring 20’s • Fun times reigned • Dancing • Flappers • Drinking

4. 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 

5. 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

6. 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!

7. 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!

8. 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

9. 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

10. 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

11. 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

13. Many waited in unemployment lines hoping for a job.

14. People in cities would wait in line for bread to bring to their family.

15. Some families were forced to relocate because they had no money.

16. 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

17. “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.

18. Hooverville

19. 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

20. *FDR* • When he was inaugurated unemployment had increased by 7 million. • Poor sections (like Harlem) had 50% of the population unemployed • Created the “New Deal”

21. The End http://www.youtube.com/watch?v=JDcR-ZS5fyw&safety_mode=true&persist_safety_mode=1&safe=active