The WESTERN DEMOCRACIES

Post-War United States of America

1.) What caused the stock market to become unstable?

2.) This individual would initiate a plan to help the U.S.A recover after 1929:

3.) Please explain the main goals of the “New Deal”.

?? WHAT YOU SHOULD KNOW ??

An “ALLIED” Winner of WWI. Has war debt paid. Agrees to the KELLOG-BRIAND PACT of 1928

◦ “Renounce war as an instrument of national policy.”◦ Disarmament – Reduction of armed forces and

weapons.

Unfortunately, the U.S.A, Great Britain, and France could not agree on set limits….so each just lessened amount of arms.

The End of War

America was the strongest country in the world.◦ Solid industry and stable economy.

!!BAD SIGNS!! Overproduction – Production of

goods exceeds the demand for them.

Increased demand for foreign raw goods.

Higher wages = price of goods increases.

By late 1920’s disaster on horizon….

U.S.A economic situation

Stock prices soar. Investors buy stock on MARGIN.

◦ Purchase stock on credit -- “GHOST MONEY”

People on edge and prices begin to fall.

Brokers ask Investors to pay money for the stocks bought on margin. ◦ Most did not have the money to pay,

so they must sell the stock Stock Market CRASHES -- October

29, 1929 Fortunes lost, jobs lost, factories

close. By 1932, over 30 million

unemployed.

Stock Market games

Period of economic crisis. High unemployment

◦ 25% (1933) 9% (2010) Homes lost Suicide of Wall Street executives

THE GREAT DEPRESSION

After President Herbert Hoover did little, a new President will step up to meet the crisis.

Franklin Delano Roosevelt. Initiates a policy known as “THE NEW DEAL”.

Government steps in

FDR’s “New Deal” -- 1933Financial relief for the unemployed.Agricultural subsidies to support farmers

and balance out supply.New jobs created by government funded

building projects.Fixed taxation issues.1935: Social Security Act to

protect citizens unable or too old to work.

New Deal (continued)….Did not end the Depression◦World War II did (need for food and

creation of arms/supplies).Main Theme: Non-interventionist state →

social/welfare stateRole of government is bigger than ever.

“RED SCARE” – 1920 Authorities round and prosecute foreign-born radicals or those who are suspected of harboring communist ideals.

United States passes laws to limit immigration of people from Europe.

Domestic Issues

1.) What caused the stock market to become unstable?

2.) This individual would initiate a plan to help the U.S.A recover after 1929:

3.) Please explain the main goals of the “New Deal”.

?? WHAT YOU SHOULD KNOW ??