The Great Depression (1929-1939)

1. The Great Depression(1929-1939) Causes and Effects

2. Post WWI: Germany • Reparations were straining economy • Weimar Republic seen as traitors • Inflation was a major problem. Germany’s government had responded to debt by simply printing more money. Inflation resulted, in this picture German children pay with stacks of worthless German currency

3. Aid from the USA • Dawes Plan • Rearranged Germany’s reparation payments. • By the late 1920s, Germany’s economy was nearing the level it enjoyed prior to WWI. Charles Dawes

4. American Prosperity of the 1920s • America emerged as the largest creditor nation after WWI • Growth of factories • Isolationism politically but active economically • Consumers started to use credit extensively American factories and farms became extremely productive during the 20s.

5. US Domination of Economy • The US sought to dominate the world’s economy after WWI. • Loaned billions to Europe • They placed tariffs, taxes on imported goods, to protect American businesses. • Tariffs hurt the global economy.

6. Problem: Overproduction • Wages did not increase as much as they should • Buying on credit • Impact America led production, making products such as the automobile ahead of the rest of the world. However, many workers could not afford such items

7. Problem: Stock Speculation on Wall Street • The New York Stock Exchange • Stocks prices kept climbingto excessive levels • Consumers borrowed money from the banks to invest in the stock market. The New York Stock Exchange

8. The Stock Market Crash • On Thursday October 24, 1929, stock prices drastically fell. • Stock values seemed worthless.. • The market crash is the beginning of the Great Depression.

9. Impact of the Crash • All industries were affected • Unemployment skyrocketed. • .As credit collapsed, banks weakened and many ended up failing. People with no jobs, obviously could not pay off their loans.

10. The Depression Spreads • Spread to the rest of the world • Everyone wanted to be repaid their loans • As businesses closed, the prices of goods dropped • Unemployment increases Poorly run banks who had made risky loans began to fail

11. Democracy Weakens • Many new democracies in Europe • Weak economy questioned political philosophy • Instability created opportunities for major changes in some countries

12. The Nazi Party in Germany • Started in the 1920s • Led by Hitler • Blamed European Jews for economic collapse • Citizens looked for any answers to improve their situation.