the great depression (1929-1939). what was the great depression? the great depression: a period of...
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What was the Great Depression?
The Great Depression: a period of very low economic activity and high unemployment that spread throughout the world during the 1930s
Economic Boom in the United States
The Roaring 20’s American factories produced most of the
world’s manufactured goods American workers made more money
than workers in other countries Banks in the U.S. loaned other countries
large amounts of money
Economic Struggles in Europe
Most nations were deep in debt after World War I
Many countries printed too much money and experienced inflation (money loses value and prices go up)
Many European nations relied too much on the U.S. economy
Causes of the Great Depression
Too much confidence in the economy Americans borrowed and spent too much People made careless investments Factories produced more goods than
they could sell
The Stock Market Crash of 1929 The economy slowed down
Stock values began to fall Investors panicked and too
many people wanted to sell their stocks
Stockbrokers demanded that borrowers pay off loans People withdrew money from banks to pay off
loans Many banks did not have enough money and
had to close Prices dropped further
On October 29, 1929, Black Tuesday, values of stocks “crashed” to record lows
Effects of the Great Depression
Many banks and factories closed People lost faith in the economy
People bought less and invested less Many people became homeless Unemployment was at an all time high
1/4 Americans and British jobless 2/5 Germans jobless
The United States Kept its democratic form of government
Voters gave government more power to deal with depression
The New Deal: set of programs started by President Franklin D. Roosevelt that helped bring the U.S. out of the Great Depression The Social Security Act of 1935
Benefits for retired, disabled, and unemployed Public building projects
Created new jobs More government involvement in economy
Rules and regulations for businesses Assistance for farmers Higher taxes to pay for programs
Germany After WWI, Germany set up a democratic government
New government failed to solve economic problems Germans lost faith in democracy
During the Great Depression, Germans wanted a strong leader to help with their economic problems Adolf Hitler: leader of the Nazi Party and dictator of
Germany from 1933-1945 His ideas inspired German people who were suffering under the
Great Depression and the Treaty of Versailles Nazism: the political beliefs of the Nazi (National Socialist German
Workers’) Party Promised to build a more powerful Germany Called for a powerful leader (dictator) to get things done quickly Blamed Jewish people for Germany’s problems
His harsh rule brought Germany out of the depression
Great Britain
Kept its democratic form of government Voters elected a new political party to help the economy
economic retrenchment: cutting back on other government programs and focusing on economic improvement More government involvement in the economy
Raised tariffs to protect British businesses Cut back money supply to limit inflation Lowered interest rates on loans to encourage spending
Balanced the budget (got the government out of debt) Raised taxes and controlled government spending
Cut military spending – saved money but weakened defense ability