After WWI, the Treaty of Versailles created new borders and states but many were unhappy with the results, fueling disputes. The League of Nations was ineffective at maintaining peace without US support. Strict enforcement of reparations on Germany led to economic issues across Europe. As the global depression took hold in the late 1920s and early 1930s, unemployment rose sharply and economic output declined severely in nearly every country.

1. Futile Search for Stability

2.  After
WWI an uneasy peace was created
using new boundaries and new states
• Unfortunately many were unhappy
 Border disputes
 Treaty of Versailles

3.  TheLeague of Nations was supposed to
help maintain the peace
• Not effective
• The US didn’t join the League of Nations
 Didn’t want to be involved in European affairs
 Henry Cabot Lodge was concerned at getting involved in more
world conflicts
• Weren’t able to use force to uphold the treaties
and stop aggression

4.  strict
enforcement of the Treaty of
Versailles
• Reparations from Germany
 132 billion German marks were owed ($33 billion US
dollars)
 Made their first payment in 1921
• In 1922 Germany announced it was unable to pay
and France sent troops into the Ruhr Valley
 Germany’s chief industrial and mining valley
 France collected reparations by operating the mines
and factories

6.  The Dawes Plan
• A US plan coordinating German payments to help
them pay
• $200 million loan which opened the door to heavy
American investment in Europe
• A brief period of prosperity followed in 1924-1929

7.  Guaranteed Germany’s new western
borders with France and Belgium
• Viewed as a beginning of peace
• Germany joined the League of Nations in 1926
 Kellogg-Briand Pact
• The nations pledged to “renounce war as an
instrument of national policy”
• Nothing was said as to what would happen if
anyone violated the pact

8. A depression is a period of low economic
activity and rising unemployment
 Causes
• Series of economic downturns by individual
nations in the late 1920’s
• International financial crisis involving the U.S.
stock market

9.  United States 1929:3  Sweden 1930:2 1932:3
1933:2  Denmark 1930:4 1933:2
 Great Britain 1930:1  Poland 1929:1 1933:2
1932:4  Argentina 1929:2
 Germany 1928:1 1932:3 1932:1
 France 1930:2 1932:3  Brazil 1928:3 1931:4
 Canada 1929:2 1933:2  Japan 1930:1 1932:3
 Switzerland 1929:4  India 1929:4 1931:4
1933:1  South Africa 1930:1
 Czechoslovakia 1929:4 1933:1
1933:2
 Italy 1929:3 1933:1
 Belgium 1929:3 1932:4
 Netherlands 1929:4
1933:2

10.  Benefitted from the ruined industry in
U.K., France and Germany
 The United States became a big producer of the
world’s industrial and military goods
 Although the Depression originated in the
United States, it resulted in drastic
declines in output, severe unemployment,
and acute deflation in almost every
country of the globe.

11.  New technology and consumer goods
(phone, car, movies, radios) were exported
 Buying on credit, installment plans
• Stock market stocks were traded on the margin
(by only paying for a small part)

12.  October 29, 1929 the stock
market lost more than 40%
of its value and the
economy came down with it
 causes
 1920’s prosperity was an
illusionwages had not kept up
 Americans bought on credit
 Farmers had a hard time with low
prices, they got very little for crops
and had to borrow on credit
 US had isolated itself from the rest
of the world
 High tariffs, worried on foreign
competition
 Prices for goods fell significantly
thus cutting out profits

13.  The gold standard, which linked nearly all the
countries of the world in a network of fixed currency
exchange rates, played a key role in transmitting the
American downturn to other countries.
 Every country faced some decline in prices of goods
between 1929-1933
Toronto
Stock
exchange

14. GERMANY FRANCE
 Weimar Republic  Became the strongest power on
the European continent
• No political true leaders  Devastated after the war
 Paul Von Hindenburg was  Didn’t feel depression till 1932
elected but had been a  Political chaos
general during WWI and did • Popular front was created in
not fully endorse the republic 1936
 Created the French New Deal
• Inflation caused the people  Collective bargaining rights for
on fixed incomes savings workers
become worthless  40 hour workweek
 2 week paid vacation
• Unemployment  Minimum wage
• Paved the way for the rise of  Failed to fix problems as by 1938
extremist parties French had no confidence in
their political systems

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GREAT BRITAIN RZMTOC
 Lost many markets to the  Keynes v. hayek
US during the war
• By 1921 2 million Britons
were out of work
 Labour Party lost hold and
the rise of the Conservative
power claimed credit for
bringing Britain out of the
depression
 John Maynard Keynes ideas
were largely ignored
• Deficit spending

16.  At first the government did little to remedy the
problem
 No government programs to provide relief
 Told people to “ride it out”
 The New Deal
 FDR elected in 1932, passed a number of bills into
law that regulated the banks and stock market
 Guidelines for industry and agriculture
 not entirely successful at ending the Great Depression
 expanded role of government in the lives of the
people