Post war Europe
In both human suffering and economic terms, the cost of World War I was immense.In both human suffering and economic terms, the cost of World War I was immense.
Unstable New Democracies
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 Weimar Republic
Inflation Causes Crisis in Germany
The Dawes Plan provided for a $200 million loan from American banks to stabilize German currency and strengthen its economy. it attracted more loans and investments from the United States. By 1929, German factories were producing as much as they had before the war.
Attempts at Economic Stability
Efforts at a Lasting Peace
In 1928, the hopes raised by the “spirit of Locarno” led to the Kellogg-Briand peace pact. Frank Kellogg, the U.S. Secretary of State, arranged this agreement with France’s Briand. The League of Nations, the obvious choice as enforcer, had no armed forces. The refusal of the United States to join the League also weakened it. Nonetheless, the peace agreements seemed a good start.
A Flawed U.S. Economy
In the late 1920s, American economic prosperity largely sustained the world economy. If the U.S. economy weakened, the whole world’s economic system might collapse. In 1929, it did.
The Great Depression
A Global Depression : Worried American bankers demanded repayment of their overseas
loans, and American investors withdrew their money from Europe.
Effects Throughout the World: In Asia, both farmers and urban workers suffered
as the value of exports fell by half between 1929 and 1931. The crash was felt
heavily in Latin America as well.
The World Confronts the Crisis: s. Each country met the crisis in its own way.
Britain Takes Steps to Improve Its Economy
France Responds to Economic Crisis : At Wall Street's New York Stock Exchange, optimism about the booming U.S economy showed in soaring prices for stocks. To get in on the boom, many middle-income people began buying stocks on margin.
Socialist Governments Find Solutions: in September 1929, some investors began to think that stock prices were unnaturally high. They started selling their stocks, believing that the prices would soon go down. By Thursday, October 24, the gradual lowering of stock prices had become an all-out slide downward.
Recovery in the United States: The Depression hit Britain severely. British voters elected a multiparty coalition, the National Government. It passed high protective tariffs, increased taxes, and regulated the currency.