A GLOBAL DEPRESSION

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A GLOBAL DEPRESSION

• 15.2 NOTES

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Main Idea

• An economic depression in the United States
  spread throughout the world and lasted for a
  decade.

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Why it matters now

• Many social and economic programs introduced
  worldwide to combat the Great Depression are
  still operating.

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Europe After the War

• Cost of the Great War had left every major
  European country bankrupt
• Dynasties fall
• Germany / Hohenzollerans
• Austria-Hungary / Hapsburgs
• Russia / Romanovs
• Turkey / Ottomans

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• Germanys new government is known as the Weimar
  Republic
• Was weak because
• Germany lacked democratic tradition
• Several major parties existed
• New govt was blamed for WWI defeat and
  humiliation (signing Treaty of Versailles)

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• Germany also faced a huge inflation crisis (the
  new govt had printed too much money and the mark
  was worthless)
• Dawes Plan provided help in the form of U.S.
  loans to stabilize economy and currency

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The Great Depression

• War-torn European economies depended on the U.S.
  economy
• If it collapsed then rest of world would also
• THREE weaknesses in U.S. economy
• Uneven distribution of wealth
• Overproduction by business and agriculture
• Decreasing demand for consumer goods

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Stock Market Crash

• New York Stock Exchange was at an all time high
  in 1929
• People began margin buying bought stocks with
  money borrowed from a stockbroker
• If stock prices fell, investors would have no
  money to pay them off
• Black Tuesday (October 29, 1929) stock prices
  hit a record low

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• Everyone tried to sell their stocks and no one
  wanted to buy
• Within months unemployment rates were high,
  production slowed, businesses failed and banks
  closed
• Americans lost their land, homes, savings
  accounts, and jobs
• THE U.S. ENTERED INTO THE GREAT DEPRESSION WHICH
  LASTS A DECADE UNTIL THE BEGINNING OF WWII

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The World Response to Depression

• Other areas of the world, who had been dependent
  on U.S. loans and trade, also suffered
• Britain, France, and other European countries
  take measures to recover
• Franklin D. Roosevelt wins 1932 election in U.S.
  and begins the New Deal
• Relief, Recovery, Reform programs to help
  Americans

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