Modern World History Assign. #2-2 Chapter 15, Section 2 “A Worldwide Depression”

Struggles of New Democracies (#1)

• • • Citizens in countries with new democracies had little experience with representative government Large number of political parties meant coalition governments (temporary alliances of several parties) needed to gain majorities to govern Frequent leadership changes

Shows seats in German Reichstag belonging to 9 separate political parties based on the percentage of the popular vote they received.

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Weimar Republic

Weimar Republic – democratic government set up for Germany at the end of the war that was blamed by Germans for the defeat in WWI and for signing the hated Treaty of Versailles

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Economic Problems of Weimar Republic (#2)

Germany had printed more money (rather than raise taxes) to pay for WWI Germany forced to pay reparations, so they printed more money More money in circulation led to incredibly high inflation Recovery was helped by the Dawes Plan (a $200 million loan from American banks to stabilize the German currency) Once Germany on the right track, more loans and foreign investments came which further helped the recovery

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Efforts at Lasting Peace (#3)

Germany and France tried to improve relations by signing a treaty in which they promised not to declare war on each other and to respect each others’ (and Belgium’s) borders Germany admitted into League of Nations Kellogg-Briand Pact – peace agreement signed by nearly all the nations on Earth in 1928 that they would not declare war on other nations

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U.S. Economic Collapse (#4)

Uneven distribution of wealth (rich gaining most of the profits of the 1920s) Overproduction of businesses led to cuts in production, leading to lay offs and higher unemployment Overproduction in agriculture led to farm prices plummeting Many Americans began buying less due to high consumer debts (they bought the new consumer goods of the 1920s without getting wage increases) Stock prices soared leading to buying on margin; when prices stabilized stockholders with loans panicked and sold their stocks leading to a stock market crash

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A Global Depression (#5)

When depression hit the U.S., American bankers demanded loans to Europe be repaid, U.S bought fewer goods from Europe, and U.S. raised tariffs on goods from Europe (all of these hurt Europe’s economy) Other nations raised their tariffs, too, and world trade dropped 65% Nations with war debt hit especially hard (Germany, Austria) Prices dropped on far exports around the world as demand fell

Great Britain Deals with the Depression (#6)

• • • Britain elected a coalition government (called the National Government) that made reforms to help improve the economy It set high protective tariffs, increased taxes, regulated currency, lowered interest rates to encourage industrial growth Gradually the economy recovered

France Deals with the Depression (#6)

• • • A coalition (known as the Popular Front) of moderates, socialists, and communists passed reforms to attempt to improve the economy These reforms were only somewhat successful as wage gains were offset by higher prices, and unemployment remained high Despite the weak results, the government remained in power and rebellions did not break out

Scandinavian Nations Deal with the Depression (#6)

• • The nations of Denmark, Sweden, and Norway all elected socialist governments These governments did the following: – Had massive public works projects to get people working – Raised pensions for the elderly – Increased unemployment insurance – Had subsidies for housing – Increased welfare benefits – Increased taxes to pay for it all

The U.S. Deals with the Depression (#6)

• • • • Franklin Roosevelt was elected in 1932 and got his New Deal programs passed New Deal programs financed large public works programs, welfare and relief programs, pensions for the elderly Taxes were raised to pay for these programs Also, banking and stock market were regulated

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World Confronts the Crisis

Great Britain, France, Scandinavian nations, and the U.S. were able to address the economic crisis through reforms passed by their democratic governments Other nations were unable to do this, and turned to strong leaders to help them out of their economic situations