World Issues in the 1930s

Black Tuesday: October 29, 1929

It was the day everything came to a stop!

Stock prices had been steadily falling throughout Oct. 1929. This led stock brokers to make “Margin Calls”. Investors all began to frantically sell their stocks back!

--Keep in mind supply and demand --

The massive selling of stocks caused prices to plummet even further………

October 29, 1929: Stock market closed

losing $15 billion in one day!!!!!

In the months following the Market Crash in October………

-A loss of investment led many major companies to declare bankruptcy.-**Banks were forced to close because all the money they had invested in the market was lost. People who had put their savings in the banks lost everything!

-People lost their jobs, their cars, their homes.

-Inflation hit consumer goods…prices were high and supplies were short!

Beyond the Crash….What caused the Depression??

1. **Overproduction!: Better technology led to the production of more goods than consumers could possibly buy!

2. More than 2/3 of U.S. families earned less than $2500 a year!!! The majority of the population could not afford to keep the economy booming!

3. High tariffs on foreign goods led to foreign nations raising tariffs on U.S. imports

4. The Federal Reserve Board made the mistake of lowering interest rates which gave banks even more money to invest in the stock market!

Impact of the depression on the American people1929-1932

***************DUST BOWL**************

-As crop prices dropped in the 1920s American farmers left their fields uncultivated. The land left unfarmed began to dry up throughout the Great Plains. When a drought hit the region in 1932 the result were storms of dirt brought on by the strong winds carrying the dirt from the dry land. Most of the fertile farmland and homes across the Great Plains were destroyed and many people died from the hazardous conditions!

FDRHe had a BIIIIIIIIIIIIIIIG MESS THROWN IN HIS LAP!

-Roosevelt did not take office until March 1933 and things got a lot worse between November and March!Unemployment, foreclosures, and bank issues continued to get worse!

-Bank Runspeople who still had money in banks rushed to get their money back….this resulted in 4,000 banks collapsing by 1933

**Bank Holidays: states began to close banks before bank runs put them out of business. The banks would not be allowed to re-open until they proved to the government that they were financially stable!

HAPPY DAYS ON THE WAY?The 100 Days Begins!**”Hundred Days”

(March 9-June 16, 1933)

Roosevelt convinced Congress to pass15 major bills that would help ease the economic crisis. It was the most legislation passed by Congress in such a period of time in U.S. history

The programs Congress would

Create that would force Govt and Business to work together to restore the economy were called

**NEW NATIONALISM

The True Superman……FDR to the RESCUE!!!!!!!!!!!!!!!!!!!!!!!!!!!!

-**Roosevelt believed the first Step to fighting the depression was restoring confidence in the U.S. banking system!

-SOLUTION???????-

***Emergency Banking

Relief Act

-Federal examiners had to issue each bank a license showing the public that the bank was financially sound.

Roosevelt called his programs

THE NEW DEAL

*Civilian Conservation Corps (CCC)

-Trained men between ages 18-25 to do public service work such as planting trees, fighting forest fires, and building reservoirs. The CCC had employed over 3 million men by 1942

*Federal Deposit Insurance Corporation (FDIC)

-The government insures the money you deposit in a bank up to $100,000. This way if a bank loses your money, you are not affected!

*Fair Labor Standards Act

-Established a guaranteed 40 hour workweek for most hourly workers.

So what type of economy were we running??? (OGT TEST TOPIC)

1. Command Economy: an economic system in which the government authorities make all major decisions regarding the

production and distribution of goods and services. (ex: the former Soviet Union)

2. Market Economy: An economy in which the setting of prices and allocating of resources are determined largely by the forces of

supply and demand.(Ex: the United States)

3. Mixed Economy: An economic system which is a combination of Market and Command economic systems where the forces of

supply and demand control most consumer good production, but government directs industry in need areas.

So….what type of economy do you think the U.S. was running in 1935?

The Rise of Dictators in Europe*The Treaty of Versailles, the failure of the League of Nations, and the economic depression that hit Europe after WWI led to the rise in dictatorships in Europe!

Italy-Italy developed the first major dictatorship in Europe.

-*Benito Mussolini became Italy’s dictator in 1919 and established a Fascist government.

-*What is Fascism: Fascism was a form of aggressive nationalism! Followers believed the nation was more important than the individual. They believed a nation became great by expanding territory and building its military! Fascists hated communists!

The Soviet Unionformally Russia -Under Vladimir Lenin a communist

government was established and the Russian territories were renamed the Union of Soviet Socialists Republics in 1922 (USSR). The Communists established a dictatorship!

-Vladimir Lenin passed away and in 1926, one of his advisors, *JOSEPH STALIN, had become the new soviet dictator

-Stalin began a massive effort to industrialize the country. In the first ten years of his reign over a million peasants who opposed his communist policies were murdered!

Germany-The economic chaos in Germany after WWI led to the rise of new political parties….one of those….THE NAZI PARTY!

-The Nazi Party was nationalistic and anti-communist. The leader of the party was *Adolf Hitler!

-By 1933 Hitler pressured the German legislature into making him Prime Minister. During that same year, German storm troopers intimidated voters into giving Hitler dictatorial powers.

Japan-Hard economic times also hit Japan after WWI. The poor economy led to big problems for the Japanese govt.

-Many citizens and army officials wanted to begin seizing foreign territories to get the resources they desperately needed.

-In 1931 the Japanese army led a coup d ‘etat, taking control of the Japanese government.

**In 1931 Japan first invaded the Chinese province of MANCHURIA to gain needed supplies!

Next Up For Hitler???Czechoslovakia!**-At the Munich Conference of 1938 leaders from Great Britain and France threatened to attack Germany if it attempted to take any more from the free European nations.

But, to avoid war both nations agreed to allow Hitler to keep lands the Nazis had already invaded as long as he did not push for any more territory.

**APPEASEMENT: policy of allowing a group or individual to get away with certain behavior in hopes of keeping that person happy and not looking to create major problems.

By 1937 Japan had aligned itself with Germany and Italy. These countries became known as the Axis powers.