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The Great Depression: Post WWI Economic Problems Ms. Payne September 21, 2011 The Great Depression: Post WWI Economic Problems SS6H7a Describe major developments following WWI: the Russian Revolution, the Treaty of Versailles, worldwide depression, and the rise of Nazism The Great Depression: Post WWI Economic Problems ESSENTIAL QUESTION: How did the Treaty of Versailles and world-wide depression impact Europe in the years between World War I and World War II? ISN: Cornell Notes Worldwide Depression Definitions: Economic Depression: period of low economic activity when many people lose their jobs Inflation: period when money loses it value and businesses raise prices Stock Market Crash: a sudden dramatic decline of stock prices across a significant crosssection of a stock market, resulting in a significant loss of paper wealth Depression in Germany Factors German Resentment and Humiliation The Great Depression: Post WWI Economic Problems Germany ◦ made the 1st of reparation payments in 1921 ◦ claimed they could not afford to pay anymore The Great Depression: Post WWI Economic Problems France’s Response Use German payments to rebuild their own economy. Sent troops to take German’s valuable mines and factories The Great Depression: Post WWI Economic Problems Germany’s Response workers at factories and mines went on strike protest France’s takeover. began printing more money to pay wages Caused inflation Value of money ↓ Businesses prices ↑ Result takes more $$$ to buy things. people needed wheelbarrows full of money to buy a loaf of bread This German woman is using German paper money to keep her stove going. It was so worthless, the best use was for firewood! The Great Depression: Post WWI Economic Problems Causes of the Great Depression Crash of the U.S. stock market The Great Depression: Post WWI Economic Problems Causes of the Great Depression Overproduction Inability to pay back loans ◦ Unemployed ◦ Investors Banks wanted loans paid back Banks collapsed many people lost their entire savings. The Great Depression: Post WWI Economic Problems The Great Depression spreads to Europe ◦ American investors pulled their money out of European banks. ◦ The European economy collapsed as well. ◦ Half of Germany’s population was unemployed. Unemployment Rates The Great Depression: Post WWI Economic Problems Impact Rise of Nazism & Hitler 1931 German Financial Crisis PBWorks http://ss6paynelessons.pbworks.c om/w/page/45461718/Worldwide %20Depression YouTube http://youtu.be/IFSad6Mphoo ISN: Cornell Notes Worldwide Depression Causes: Long-Term Huge debt resulting from WWI European dependence on American Loans Widespread of credit Overproduction of goods paired with a decline in demand ISN: Cornell Notes Worldwide Depression Causes: Short-Term Stock Market Crash 1929 Banks demand repayment of loans Americans can no longer give loans to other countries Businesses and factories fail High protective tariffs ISN: Cornell Notes Worldwide Depression Effects: Short-term Vast Unemployment and misery Bank failures and collapse of credit Loss of faith in capitalism and democracy Authoritarian leaders gain support ISN: Cornell Notes Worldwide Depression Effects: Long-term Nazis take control of Germany Scapegoats are blamed for economy Fascist leaders gain control of Eastern Europe World War II begins ISN: Cornell Notes Worldwide Depression Summary: