Unstable Governments &Weak Democracies

• Fall of Kingdoms/Empires new democracies in Europe.

• Ruled by others for centuries: don’t know how to rule themselves.

• Frequent changes in government = instability

• 1919 Weimer Republic: Germany’s gov’t with a lot of weaknesses.

The Roaring 20’s

• Fun times reigned

–Dancing

–Flappers

–Drinking

German Inflation/Attempts

to Stabilize• War Debt

• Inflation=Cost more than it’s worth.

• The new concept of “credit” people didn’t have $, but they were spending

• Germany prints own money=WORTHLESS!

• Loans from the U.S.

Continue to next slide

Continued Why was this bad?

• Credit system– People didn’t really have

the money they were spending

• WWI– The U.S. was a major

credit loaner to other nations in need

– Many of these nations could not pay us back

Efforts At A Lasting Peace• Treaty of Versailles – Good start but

weak no enforcement• Germany signed peace treaty w/ France Kellogg-Briand Pact

• Many nations renounced war (not U.S)• League of Nations = FAILED• We didn’t join!

Flawed U.S. Economy• Europe’s lands = Trashed by war

• Good for U.S. factories = 50% industrial goods produced at home

• Uneven wealth: $ goes to factory owners NOT workers

• Farms: produce too much food lose $

• Banks closing!

Stock Market Crash & Global Depression

• People buying stocks on margin (credit)

• 1929: Stock Market Crashes: Banks, Margins, BAD loans, back loans

• Tariffs: stop buying each other’s goods; world trade drops 65%

• European banks = NO $

• Can no longer support Mandates (colonies)

• MAIN CAUSE closing of banks

The Stock Market• People bought stocks

on margins– If a stock is $100 you

can pay $10 now and the rest later when the stock rose

• Stocks fall– Now the person has

less than $100 and no money to pay back

And then….

• With people panicking about their money investors tried to sell their stocks– This leads to a huge decline

in stocks– Stocks were worthless now

• People who bought on “margins” now could not pay

• Investors were average people that were now broke

• Farmers were already feeling the effects– Prices of crops went down– Many farms foreclosed

• People could not afford luxuries– Factories shut down– Businesses went out

• Banks could not pay out money• People could not pay their taxes

– Schools shut down due to lack of funds

• Many families became homeless and had to live in shanties

Many waited in unemployment lines hoping for a job.

People in cities would wait in line for bread to bring to their family.

Some families were forced to relocate because they had no money.

• Herbert Hoover was president at the start

• Philosophy: We’ll make it!

• What He Did: Nothing

• The poor were looking for help and no ideas on how to correct or help were coming

“Hooverville”• Some families were

forced to live in shanty towns– A grouping of shacks

and tents in vacant lots

• They were referred to as “Hooverville” because of President Hoover’s lack of help during the depression.

The World Responds• Britain: Very industrial, depression hit hard.

– High tariffs; increased taxes; regulated $, led to slow recovery.

• France: self-sufficient, agriculture economy, less foreign trade = weak depression

• Socialist govt’s: heavy govt. involvement & taxes (still today) = no depression

• United States: – Hoover: did nothing to help the depression.– 1932: Franklin Roosevelt elected & starts New Deal,

brings $ to U.S. & creates jobs

*FDR*• When he was

inaugurated unemployment had increased by 7 million.

• Poor sections (like Harlem) had 50% of the population unemployed

• Created the “New Deal”

http://www.youtube.com/watch?v=JDcR-ZS5fyw&safety_mode=true&persist_safety_mode=1&safe=active