The Global Depression by daniel Grilli

World War I was a war that lasted 4 years, from 1914 to 1918. This war originated in Europe, This World War had huge effects on all of its combatants. After the war, a Great Depression ensued.

The Dawes Plan gave $200 million loan from American banks to Germany. This was to stabilize German currency and strengthen its economy. Being put into effect in 1924, the Dawes Plan slowed inflation. Germany then attracted more loans and investments from the United States. By 1929, German factories were producing as much as they had before the war.
Germany also faced enormous economic problems that had begun during the war. Germany printed more money to fix this. As a result, the value of the mark, as Germany’s currency was called, fell sharply. Severe inflation set in. Germans needed more and more money to buy even the most basic goods. People brought wheelbarrows to buy bread and other simple goods.
By 1929, American factories were turning out nearly half of the world’s industrial goods. The rising productivity led to enormous profits. However, this new wealth was not evenly distributed. The Americans at the bottom of the social ladder still could not buy these products. Therefore, Factory cuts were made in which more workers lost their jobs. However, too much food was still being made, equaling Overproduction and Underconsumption.
In September 1929, some investors began to think that stock prices were unnat- urally high. They started selling their stocks, believing the prices would soon go down. By Thursday, October 24, the gradual lowering of stock prices had become an all-out slide downward. A panic resulted. Everyone wanted to sell stocks, and no one wanted to buy. Prices plunged to a new low on Tuesday, October 29. A record 16 million stocks were sold. Then the market collapsed.
The American market for European goods dropped sharply as the U.S. Congress placed high tariffs on imported goods so that American dollars would stay in the United States and pay for American goods. This policy backfired. Many countries that depended on exporting goods to the United States also suffered. Moreover, when the United States raised tariffs, it set off a chain reaction. Other nations imposed their own higher tariffs. World trade dropped by 65 percent. This contributed further to the economic downturn. Unemployment rates soared.

Scientific farming methods and new farm machinery had dramatically increased crop yields. American farmers were producing more food. Meanwhile,they faced new competition from farmers in Australia, Latin America, and Europe. As a result, a worldwide surplus of agricultural products drove prices and profits down. Unable to sell their crops, many farmers couldn't pay off their loans and therefore had to sell their jobs.

The Foreign Minister's of Germany and France met in Switzerland with leaders of Belgium, Italy, and Britain. These Countries all agreed to not make war with each other. In a couple of years, a treaty called the Kellogg-Briand peace pact was signed. This renounced war, and although it didn't do anything, It showed that they were making an effort.

Unlike Britain, France had a more self-sufficient economy. In 1930, it was still heavily agricultural and less dependent on foreign trade. Nevertheless, by 1935, one million French workers were unemployed.

Roosevelt immediately began a program of government reform that he called the New Deal. Large public works projects helped to provide jobs for the unemployed. New government agencies gave financial help to businesses and farms. Large amounts of public money were spent on welfare and relief programs. This eventually reformed the American economic system.

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Daniel Grilli
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