GLOBAL DEPRESSION1919-1939

Turmoil of Versailles

• Border disputes in Eastern Europe cause resentment.

• U.S. does not ratify T.of V. and is not part of the League of Nations

• The League is powerless to intervene in international disputes

Turmoil…

• High inflation and unemployment – factories and banks close

• Mark becomes worthless – by Nov. 1923 4.2 TRILLION Marks = $1.00 U.S.• Germany unable to pay reparations – 30%

of work force unemployed (6 mil.)• France occupies the German Ruhr Valley –

collect payment by using factories & mines

The Worthless German MarkWeimer Republic 1923

The Dawes Plan 1924

• An International commission produces a new plan for reparations.

• Reduced reparations & coordinated Germany’s annual payments

• U.S. loans $200 mil. for German recovery

• Opens door to heavy American investments in Europe

Charles Dawes• Chairman of Commission

The Treaty of Lacarno

• “Peace” between Germany & France – guaranteed Germany’s western borders

• 1926 Germany joins League of Nations

• 1928 The Kellogg-Briand Pact – 63 nations sign an accord to “renounce war as an instrument of national policy” (no consequence for violating pact).

Aristide Briand (Fr.) Austin Chamberlain (G.B.) & Gustav Stressmann (Germ)

The Treaty of Lacarno

Stock Market Crash 1929• Mid 1920’s – prices fall because of overproduction (i.e. -

wheat)• International financial crisis: The U.S. loaned money to

Germany to pay reparations to G.B. & France opening the door for American investors

• Investors begin to pull money out of Europe to play in the booming U.S. stock market

• October 1929 – U.S. Stock Market CrashesInvestors pull more money out of Europe – European banks

crash

The Great Depression

• U.S. Pres. Franklin Roosevelt (FDR) signs the “New Deal” – Active government intervention creating a Public works (CREATES JOBS) program – Roads, Dams, Bridges, Flood Control (Tennessee Valley Authority)

• Social legislation – begins social welfare• 1935 – Social Security Act – old age

pension & unemployment insurance

European Depression

• Millions out of work (G.B. – 25%, Germany – 40%)

• In response governments take a stronger role in regulating economies

• Marxism/Communism become more popular• Masses turn to political leaders who promise

simple solutions in exchange for dictatorial power

Fascism Emphasizes

• Loyalty & Obedience• Punish those responsible• Struggle or be doomed• Propaganda & censorship• Mass rallies• Promises to save economy• Restore national pride• Uniforms, salutes, symbols• Loose individuality for state