Towards the Great Depression

Name several financial crises in European History.

How did these problems get solved? Or Failed Solutions?

How did the worldwide economy fail so quickly after WWI?

Financial crisis from the war and peace settlement

Production and distribution fell world-wide Most governments refused to run budget

deficits

United States’ Role

U.S. sought loans and money owed to them by the Allied countries.

Private American capital flowed through Europe during the 1920’s

Dawes Plan

Sought to retrieve all war reparations and funnel the money directly to the United States.

Investing Americans speculated, took out loans, and

invested in the Stock Market. The Bubble Burst with many not being

able to pay back loans. Banks shut down.

Europe’s Economy

No more American capital flowed into Europe after the stock market crash.

Hoover announced 1 year of no reparation payments.

Lausanne Conference- end reparations

Agriculture

Wheat prices plummet High unemployment Eastern Europe hit the

hardest

John M. Keynes

Pgs. 910-11

John Keynes

“General Theory of Employment, Interest, and Money.”

Government should spend more to expand overall demand during economic troubles.

Homework:

Read Pages 912-914 Describe the conditions in Great Britain

and France during the depression. How did each democracy combat the

depression? What events occurred and leaders

emerged during this time period?