The Great Depression(1929-1939)

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

Different Responses to the Great Depression

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