Worldwide Depression

Mrs. GurzlerWorld History

Questions of the Day

• What is an economic depression?

• How do they happen??

• What is inflation?

• What is a recession?

Differences between…

• An old joke…– A recession is when your neighbor loses their

job. A depression is when you lose your job.

– A recession is a short economic decline, while a depression lasts for a long period of time.

– Recession are a natural part of an economic cycle.

Inflation

• Economic situation that comes about when the amount of money in circulation increases. The more money there is, the less the money is worth.

The Economic Situation

• 1922 – For every US Dollar 162 Marks

• A Couple Months Later…– 7,000 Marks for every US Dollar!

– By 1923, it was printing 400 quadrillion marks a day!!!

– With so much money in circulation, what happens to the money?

The Rise in Bread Prices (in marks)

• December 1918 0.5 • December 1921 4 • December 1922 163 • January 1923 250 • March 1923 463 • June 1923 1,465• July 1923 3,465• August 1923 69,000 • September 1923 1,512,000 • October 1923 1,743,000,000 • November 1923 201,000,000,000

The Rise of Other Goods

Item 1913 Summer 1923 Nov. 1923

1 egg 0.08 5,000 80,000,000,000

1 kg butter 2.70 26,000 6,000,000,000,000

1 kg beef 1.75 18,800 5,600,000,000,000

Pair shoes 12.00 1,000,000 32,000,000,000,000

Emergency Money, “Notegold”

During hyperinflation, some towns printed emergency money called “Notegolds.” They would depict anti-Jews scenes.

German Inflation

Inflation Madness

In 1923, a woman feeds her stove with German marks because they can no longer afford firewood with it.

German Mark

What Stopped the Madness?

• Charles Dawes, an American banker, provided a loan for Germany to help stabilize its currency.

• They established a more realistic payment plan for their debts from WWI.

• By 1929, Germany was all set.

Great Depression

Stock Market CRASH!

GLOBAL DEPRESSION

• American investors withdrew money from Europe.

• They raise tariffs and other countries decide to do the same.

• Why would they raise tariffs??

• This hurts world trade and it drops by 65%

• Unemployment rates soar.

Effects Around the World

• 1931 - Austria’s national bank fails!

• Europe is in pain from the tariffs on their goods. Still able to preserve democracy.

• In Asia, farmers are hurt as the value of exports fell in half in 1929 to 1931.

• Latin America is hurt – less Americans and Europeans can afford sugar and coffee.

Samples of Political Cartoons

Samples of Political Cartoons