Transcript
Page 1: Problems of the 1930s The Cause and Effect of the Great Depression

Problems of the 1930’s

The Cause and Effect of the Great Depression

Page 2: Problems of the 1930s The Cause and Effect of the Great Depression

Postwar Issues

Postwar Europe faced grave problems:• Returning veterans needed jobs.• War-ravaged lands needed to be rebuilt. • Many nations owed huge debts because they had

borrowed heavily to pay for the war.• Economic problems fed social unrest and made

radical ideas more popular.• The peace settlements dissatisfied many Europeans,

especially in Germany and Eastern Europe.• Europe lacked strong leaders just when they were

most needed.

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Page 3: Problems of the 1930s The Cause and Effect of the Great Depression

Autumn 1929• Consumer spending slowed, sales suffered

• Many feared drop in stock prices

• Nervous investors began to sell off stocks

Market Crash• Stock market crash ruined many investors

• Banks that had lent money to investors were also in deep financial trouble

• Devastating blow dealt to American industry

October 29• Black Tuesday, 16 million shares of stock sold in one single day

• Few people wanted to buy stock, stock prices collapsed

• Investors who had borrowed to buy stocks forced to sell at loss

The Stock Market Crash

Page 4: Problems of the 1930s The Cause and Effect of the Great Depression

The Stock Market Crash

• In 1929, the Wall Street stock market crash ushered in a worldwide financial crisis.

Page 5: Problems of the 1930s The Cause and Effect of the Great Depression

The Great Depression

• Nation after nation fell victim to:– Industrial decline– Bank failures– Deflated prices and profits– Commercial stagnation

Page 6: Problems of the 1930s The Cause and Effect of the Great Depression

• As industry slowed, workers lost jobs

• One out of four unemployed by 1933

• Joblessness, poverty reduced ability to buy food, goods, hurt industry even further

• Banks suffered when businesses, investors failed to pay off loans; many failed

Industry Slows

• American economy took severe downward dive after stock market crash

• Economic downturn became known as Great Depression

• Depression result of complex factors

• One factor, slowdown in industry; began before crash, worsened quickly after

Great Depression

The Depression Spreads

Page 7: Problems of the 1930s The Cause and Effect of the Great Depression

In 1929 America was one of the world’s leading importers and lenders of money, and created much of the world’s industrial output. Events affecting America’s economy would soon impact other countries.

• Some countries having difficulties before stock market crash

• European countries recovering from World War I

• Allied Powers in debt to U.S.

Before the Crash

• High interest rates in Great Britain

• Decreased spending, high unemployment

• Germany’s reparations led to inflation, crippled economy

World Woes

• Japan’s economic depression forced banks to close

• U.S. Great Depression latest in long series of economic crises

• Effects far worse

Series of Crises

The Worldwide Depression

Page 8: Problems of the 1930s The Cause and Effect of the Great Depression

Personal Hardship• People the world over suffered from:

– Lowered standards of living– Unemployment– Hunger– Fear of the

future

Page 9: Problems of the 1930s The Cause and Effect of the Great Depression

The postwar era left many countries politically unstable. As the Depression continued, unrest grew worse.

• Instability in Great Britain and France led to formation of several new governments

• Extremist political groups gained strength

– Germany’s Nazi Party blamed Jews

– Italian dictator Benito Mussolini tightened his control of the nation

Political Impact

• Widespread misery, hopelessness worldwide

• Ideal conditions for rise of leaders who promised to restore their nations to glory

• World in midst of troubled times

• Worse crisis lay ahead

Economies Worsen, New Leaders Emerge

The Worldwide Depression

Page 10: Problems of the 1930s The Cause and Effect of the Great Depression

Policies of Self-Sufficiency

• In desperation, governments sought economic recovery by adopting restrictive policies of self-sufficiency:– High tariffs– Import quotas– Barter agreements

Page 11: Problems of the 1930s The Cause and Effect of the Great Depression

Planned Economies

• Governments experimented with new plans for internal economies.

Page 12: Problems of the 1930s The Cause and Effect of the Great Depression

Great Britain

• Great Britain adopted far-reaching measures in the development of a planned national economy.

Page 13: Problems of the 1930s The Cause and Effect of the Great Depression

Overview: The Great Depression1

Worldwide interrelationship of governments and economiesHuge war debtsAmerican loans to EuropeWidespread use of creditOverproduction of goodsIndustrial wages rise as farm earnings fall

New York stock market crash Farmers unable to repay loansBanks demand repayment of loansAmerican loans to other countries dry upWithout capital, businesses and factories fail

Vast unemployment and miseryProtective tariffs imposed Loss of faith in capitalism and democracyAuthoritarian leaders emerge

Rise of fascism and NazismGovernments experiment with social programsPeople blame scapegoats World War II begins

Long-Term Causes Immediate Causes

Immediate Effects Long-Term Effects

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Unemployment, 1928 – 19381

Page 15: Problems of the 1930s The Cause and Effect of the Great Depression

Britain and France in the Postwar Era

The Great Depression intensified existing economic problems.

Britain set up a coalition government made up of leaders from all three major parties. The government provided some unemployment benefits.

British leaders wanted to relax the Versailles treaty’s harsh treatment of Germany.

The French economy recovered fairly quickly.

Many political parties competed for power and France was ruled by a series of coalition governments.

France created the Maginot Line to secure its borders against Germany.

The government strengthened the military and sought alliances with other countries, including the Soviet Union.

BRITAIN FRANCE

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