Transcript What was the Great Depression? The Great Depression

The Great Depression
(1929-1939)
What was the Great Depression?
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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
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The Roaring 20’s
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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
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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
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Too much confidence in the economy
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Americans borrowed and spent too much
People made careless investments
Factories produced more goods than
they could sell
The Stock Market Crash of 1929
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The economy slowed down
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Stockbrokers demanded
that borrowers pay off loans
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Stock values began to fall
Investors panicked and too
many people wanted to sell
their stocks
People withdrew money from banks to pay off
loans
Many banks did not have enough money and
had to close
Prices dropped further
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On October 29, 1929, Black Tuesday, values of
stocks “crashed” to record lows
Effects of the Great Depression
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Many banks and factories closed
People lost faith in the economy
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People bought less and invested less
Many people became homeless
Unemployment was at an all time high
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1/4 Americans and British jobless
2/5 Germans jobless
Different Responses to
the Great Depression
The United States
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Kept its democratic form of government
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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
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The Social Security Act of 1935
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Public building projects
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Benefits for retired, disabled, and unemployed
Created new jobs
More government involvement in economy
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Rules and regulations for businesses
Assistance for farmers
Higher taxes to pay for programs
Germany
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After WWI, Germany set up a democratic government
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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
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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
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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
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Kept its democratic form of government
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Voters elected a new political party to help the economy
economic retrenchment: cutting back on
other government programs and focusing
on economic improvement
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More government involvement in the economy
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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)
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Raised taxes and controlled government spending
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Cut military spending – saved money but weakened defense ability