The Great
Depression
At the end of the 1920s…
 Europe was
rebuilding. Most of
Europe was
bankrupt.
 The U.S. did not
have this problem.
The American
economy grew
during WWI.
Isolationism
 Even though the US
could help Europe they
chose a policy of
Isolationism
 Isolationism: a policy
of avoiding political or
military involvement
with other countries.
New Leadership
 At the end of the war,
many leaders had been
overthrown.
 Many political parties in
European countries led to
difficult governments that
got little done.
 In Germany a new
democratic government
was set up, it was called
The Weimar Republic
Issues in Germany
 Owed 32 Billion
after WWI to
Britain and France.
 Instead of raising
taxes to pay off the
war, Germany
printed more
money in 1923.
What problem does
this lead to?
Fixing Germany’s Inflation
 Inflation: when the price of goods & services increase due to
the decrease in the value of money.
 Germany was able to
recover from Inflation
with the help of American
Banker, Charles Dawes.
 The Dawes Plan: a plan to
collect payment from
Germany for WWI by
boosting Germany’s
economy with loans from
Americans.
 By 1929, German
businesses were back to
normal!
The U.S. Supports the
World Economy
 America’s economy had been
going strong in the 20s.
 The United States had been
supporting a lot of the world’s
economic systems.
 This made the Global
Economy like a set of bowling
pins. If the front one (USA)
was hit it could bring all of
them down.
The Weaknesses of the
U.S. Economy
 Uneven Wealth Distribution

60% of Americans earned less than $2,000 a year

The richest 5% of Americans held 33% of the income.
 Americans were buying less

Because most families can’t afford goods, businesses cut back on
production.

When businesses still weren’t profiting, they were forced to lay off
workers.
 Over-Production of goods

Due to agricultural advances, farms were producing more. A high
supply drove prices down.

Led to farmers owing $$ to banks.
NYC’s Wall Street
 At the heart of Wall Street
was the New York Stock
Exchange.
 With the price of stocks
rising, many middle class
people bought stocks on
margin. This means they pay
a small payment and borrow
the rest from a stockbroker.
 This works well as long as
prices are rising. If they
fall, the people are left
paying off the loan.
The Stock Market Crashes
 In September of 1929, investors felt like
stock prices were too high. They began to
sell their stock, hoping that prices would
come down some.
 People began to panic and sell their
stocks before prices dropped too low. No
one wanted to buy stock at this time due
to the panic.
 On October 29th, 1929 a date now known
as Black Tuesday, a record 16 million
stocks were sold and the Stock Market
crashed.
The Great Depression in the
U.S.
 The Great Depression: a world-wide
economic crisis which lasted from
1929 to the beginning of WWII.
 Expensive stocks became worthless.
 Debt increased.
 Unemployment rose.
 Factory production is cut in half.
 Failed businesses.
 Banks closed – 9 million lost their
money.
Black Tuesday Affects the
World!
 Countries that depended on
exporting goods to the U.S.
suffered
 Global trade dropped 65%
 Other countries are forced
to tax their people more.
 Unemployment soared.
 Which foreign country do
you think will be effected
most?
Fascism Grows in Europe
 During the Great Depression
many people lost faith in
democratic governments.
 Fascism: a new political
movement that promotes an
extreme loyalty to the country
and its leader.
 They believed in the struggle –
peaceful countries were weak &
could be taken over
 They believed they had to give
up their rights and follow their
leader – NO MATTER WHAT!
Fascism in Italy
 Italians turned on their
democratic government
because they felt like it
didn’t deal with the
following issues effectively...
 Italians were bitter after they
weren’t given new territories
at the Paris Peace
Conference.
 Rising Inflation.
 Rising unemployment rates.
Fascism in Italy
 Benito Mussolini promised to revive
Italy’s economy and army.
 In order to take over, he and 30,000
fascists marched to Rome and
demanded that King Victor
Emmanuel III put him in charge.

As leader he…
 Outlawed democracy
 Outlawed other political parties
 Censored radio stations and news
 Outlawed strikes by workers
Fascism in Germany
 Adolf Hitler joined the National
Socialist German Workers’ Party
(Nazi Party) in 1919.
 Nazism: an extreme form of fascism
where racial superiority and
nationalism are key.
 As leader of the Nazi Party, Hitler
was inspired by Mussolini and in 1923
he tried to take over in Munich,
Germany.
 It FAILED. Hitler was arrested for
treason.
Fascism in Germany
 In jail, Hitler wrote a book that set
forth all of his beliefs and goals.
The book was called Mein Kampf
or My Struggle
 The book talked about…
 Aryans: Hitler’s perfect “master” race
which consisted of the Germans
 His Anti-Semitism: hate for Jews
 How Germany was robbed of their
land in the Treaty of Versailles
Fascism in Germany
 After prison, Hitler travelled
around Germany to promote the
Nazi Party
 Jan. 1923 Hitler was named as
the Chancellor of Germany.
 As leader he…
 Banned all other political parties
 Had all his political opponents
arrested or killed by the SS
 SS: Hitler’s protection squad
that wore all black
Rebuilding Germany
 With the Nazis in
charge of businesses
and the economy,
many Germans went
back to work!
 Unemployment went
from 6 million to 1.5
million!
Rebuilding America
 1932 was the first election year
after the Great Depression had
begun. President Franklin D.
Roosevelt was elected to office.
 He created a program of reform
projects called The New Deal.
 The New Deal: FDR’s large
public works program that
helped provide jobs to the
unemployed Americans.
The New Deal
 It spent large amounts of money on welfare and relief
programs.
 It reformed the stock market and the banking system.
 IT WAS A SLOW CHANGE BUT The New Deal did
eventually revive America’s economy and faith in Democracy.