WORLDWIDE
ECONOMIC
DEPRESSION
Warm-Up
https://www.yo
utube.com/watc
h?v=jFICRFKtAc4

Vocab List
On My
Website
The Main Idea
An economic depression in the
United States spread
throughout the world and
lasted for a decade. This
depression allowed the rise of
dictators in Europe.

The World Post WWI
Only the United
States and Japan
came out of World
War I financially
stable.
 Europe was
rebuilding in all
aspects including
their economy.

Every European Country Was Nearly Bankrupt
New Democracies Were Unstable



The creation of new democracies created problems.
It was the 1st time for many that they were not ruled
by king or emperor.
Coalition government Temporary alliance of
political parties to make a majority.
 Did


not last long.
Frequent changes in government made it hard to
develop strong leadership and move toward long-term
goals.
The weaknesses of these governments allowed
authoritarians (dictators) to come to power.
The Weimar Republic




Germany’s new
democratic
government .
Weak Government
Too many political
parties.
Blamed for the
problems from the
Treaty of Versailles.
Inflation in Germany




Inflation The rise in the
price of a good.
Germany printed off
money to par for the war
debts.
Caused the German
dollar to lose value and
caused priced to go up.
Ex.  in 1918 Bread
Cost 1 Mark, 1922 (160
Marks), 1923 (200 billion
Marks)
Economic Stability


Germany did recover
from the inflation of
1923.
American banks
loaned Germany
money to stabilize the
economy.
 It
was good business
for the United States to
do this.
Efforts For Peace
Germany &
France made
efforts to achieve
lasting peace.
 Kellogg-Briand
Peace Pact

 Not
very effective.
Financial Collapse

In the 1920’s, the United States’
economy was keeping the world
economy from falling apart.
Financial Collapse
The US Economy was flawed because
only the wealthy were making most of the
money.
 Most people were losing their jobs and
could not afford food and shelter.
 There were warning signs that the
economy was in trouble.

Stock Market Crashes



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The stock market was booming (Making Large Profits)
This caused many people to want to buy in on the
market.
People started buying stocks on the margin.
 The would take out a loan to buy the stock and use
the profits to pay off the loan when they sold it for
more money.
Stock prices soon leveled off and began to fall.
People could not pay back their loans and the market
crashed.
The Great Depression



People could not pay the money they owed.
This caused the factories and businesses to fall as
well.
This created a depression
A


long business slump.
The stock market crash alone did not cause the
Great Depression, but it quickened the collapse of
the economy.
Banks began to close too.
A Worldwide Depression
The collapse of the American economy led to a
collapse in Europe.
 American investors took money out of Europe
which caused it to collapse.
 Many of the largest banks worldwide failed
and closed.
 The entire world was going through an
economic crisis.

The World’s Response
Britain Made economic changes to improve
their economy and it saved their democracy.
 France France focused on building its
economy from the inside and saved its
democracy.
 Socialist Governments Very successful.
Created programs to get people jobs and
begin production. Worked very well.

The United States


In 1932, Franklin D.
Roosevelt was elected
President of the United
States.
He created the New
Deal which was a
group of government
programs and reforms
to fix the economy.
Questions to Answer
1.
2.
3.
How did World War I change the
balance of economic power in the
world?
What problems did the collapse of the
American economy cause in other
countries?
How did Europe respond to the economic
crisis?
Videos
Activity
You will get in groups no larger than
4 people.
 You will make a video about what
life was life in the Great Depression
or what caused the Great
Depression.
 You have to share the video you
made with me.
