The Great Depression
AP WORLD HISTORY
CHAPTER 29B
Industrial Capitalism
 Benefits:
 Created the most substantial
economic growth in the 19th
century
 Provided opportunities for wealth
and social advancement
 Problems:
 Promoted individualistic
materialism
 Created vast social inequalities
 Unstable system  cycles of boom
and bust, expansion and recession
Great Depression
 An economic slump in North America, Europe, and
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other industrialized areas of the world that began in
1929 and lasted until about 1939.
It was the longest and most severe depression ever
experienced by the industrialized Western world.
Began in the United States
Hit hardest those nations that were most deeply
indebted to the United States, i.e., Germany and
Great Britain.
In Germany, unemployment rose sharply beginning
in late 1929, and by early 1932 it had reached 6
million workers, or 25 percent of the work force
The Stock Market Crash
 October 1929 = the stock
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market crashed
Stock prices plummeted
“Paper” fortunes were wiped
out
Banks and businesses closed
People lost their savings
World trade dropped 62% in
a couple of years
People lost their jobs 
unemployment soared
The Great Depression
 Emergence of:
 Vacant
factories
 Soup kitchens
 Bread lines
 Shantytowns
 Homeless people
and beggars
The Great Depression
 Worldwide phenomenon
 Spread from America to
Europe and beyond
 Lasted about 10 years
A Run on a Bank in Berlin
Leading up to the Great Depression:
Problems for U.S. Factories in the 1920s
 U.S. = physically
untouched by WWI
 1920s = farms and
factories were producing
more goods than could
be sold
 Unequal income
distribution in U.S. =
many Americans did not
have enough money to
buy these products
Line to a Soup Kitchen
Leading up to the Great Depression:
Problems for U.S. Factories in the 1920s
 Many European countries could
not afford to buy these goods
either
 Germany and Austria = had to
make reparations payments
and needed U.S. loans to make
them
 Britain and France = in debt to
the U.S. from money they
borrowed during WWI
 Europeans began producing
their own products again as
their economies recovered
 This reduced demand for
American products
The Great Depression: Capitalism Challenged
 Major result of the Great
Depression = capitalist
countries were challenged
and criticized
 Capitalist countries =
claimed the economy would
regulate itself and selfcorrect itself if any
problems arose
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But this wasn’t happening
during the Great Depression
The Great Depression: Capitalism Challenged
 Some countries became
interested in communism and
looked twice at the Soviet
Union
 Many Western European
countries adopted
“democratic socialism” =
greater government
regulation of the economy
and a more equal distribution
of wealth through peaceful
means and electoral politics
U.S. Response to the Great Depression
 Franklin D. Roosevelt’s New
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Deal Program (1933-1942)
Combination of reforms
designed to restart economic
growth and prevent
problems in the future
Government projects 
dams, highways, bridges,
parks, etc.
Social Security system
Federal minimum wage
U.S. Response to the Great Depression
 Various relief and welfare
programs to aid the poor,
unemployed, and elderly
 Support for workers and
labor unions
 Government subsidies for
farmers to encourage more
production
 Creation of new government
agencies to help supervise
the economy
FDR – New Deal – 1933 Stabilize the economy and provide jobs and relief to those
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who were suffering.
A series of experimental projects and programs, known
collectively as the New Deal, that aimed to restore some
measure of dignity and prosperity to many Americans.
Tennessee Valley Authority Act into law, enabling the
federal government to build dams along the Tennessee
River that controlled flooding and generated inexpensive
hydroelectric power for the people in the region.
Agricultural Adjustment Act
National Industrial Recovery Act
Works Progress Administration (WPA)
International Depression
 Millions of people lost their jobs, and many farmers
and businesses were bankrupted.
 Industrialized nations and those supplying primary
products (food and raw materials) were all affected
in one way or another.
 In Germany the United States industrial output fell
by about 50 per cent, and between 25 and 33 per
cent of the industrial labor force was unemployed.
The Great Depression
 Countries and colonies dependent on 1-2 products =
hit especially hard by the Great Depression
 Example: Chile = dependent on copper exports
 value of its copper cut by 80%
 Cocoa farmers in Ghana = badly hurt as prices of
“luxury” and “commodity” goods dropped
Latin America
 Countries that were dependent on the export of primary
products, such as those in Latin America, were already
suffering a depression in the late l920s.
 More efficient farming methods and technological
changes meant that the supply of agricultural products
was rising faster than demand, and prices were falling as
a consequence.
 Initially, the governments of the producer countries
stockpiled their products. but this depended on loans
from the USA and Europe.
 When these were recalled, the stockpiles were released
onto the market, causing prices to collapse and the
income of the primary-producing countries to fall
drastically
Japan
 As a new industrial country still heavily dependent on export
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earnings for financing its imports of essential fuel and raw
materials, was hit hard too.
The Japanese silk industry, an export staple, was already
suffering from the advent of artificial silk-like fibers produced
by Western chemical giants.
Now luxury purchases collapsed, leading to severe
unemployment and, again, a crucial political crisis.
Between 1929 and 1931, the value of Japanese exports
plummeted by 50 percent.
Workers' real income dropped by almost one-third, and there
were over three million unemployed.
compounded by bad harvests in several regions, leading to
rural begging and near-starvation.
Next
 For Japan, the depression increased suspicions of
the West and helped promote new expansionism
designed among other things to win more assured
markets in Asia.
 In the West the depression led to new welfare
programs that stimulated demand and helped
restore confidence, but it also led to radical social
and political experiments such as German Nazism.
Decline in exports from countries trading mainly in products
1928-1929 to 1932-33
Decline in exports of goods by: