the inter- the inter-war years
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THE INTER- THE INTER-WAR YEARS. The US Economy in the 1920s. US was world’s economic leader after WWI Supplied much of the world with food and supplies during and after the war Brief recession after the war, but recovered quickly Success reflected in the stock market - PowerPoint PPT PresentationTRANSCRIPT
THE INTER-THE INTER-WAR YEARS
The US Economy in the 1920s
US was world’s economic leader after WWI Supplied much of the world with food and
supplies during and after the war Brief recession after the war, but recovered
quicklySuccess reflected in the stock market Value of stocks (shares in a company) rose over
400% Many borrowed money to get in on the action
driving prices higher
STOCKPRICESSOAR!!!
‘The Roaring Twenties’The image
1920s America – “One long, crazy party, with jazz music playing on the radio, young fashionable women known as flappers wildly dancing the Charleston, large quantities of illegal alcohol being consumed, and everyone behaving in a scandalous manner.”
‘The Roaring Twenties’
The realityIn the aftermath of the war people were
determined to have fun.They had more money and more leisure
time.Women were freer than everThe entertainment industry boomed.The 1920s were the golden age for
Hollywood films. It was also the Jazz Age with its crazes for
new music and dances.
Music‘The Jazz-Age’
Film Stars
Sport
The US Economy in the 1920s
Prosperity hid major problems Most goods were bought on credit
An arrangement in which a purchaser borrows money from a bank or other lender and agrees to pay it back over time with interest
By 1929 consumer spending had slowed but production hadn’t creating a surplus of goods
The US Economy in the 1920s
Fearing the market would collapse investors began selling off their stocks in mass October 29th, 1929: Black Tuesday 16 million shares of stock sold with none bought With nobody wanting to buy stocks prices quickly
fell Those who bought stock through loans owed money
that they could not repay
The US Economy in the 1920s
To pay loses on stocks people rushed the banks to with draw moneyCalled a bank runBanks didn’t have enough money on
hand to give people so they closedSome people never did get their
money
The Depression Spreads
Slowdown in industry led to job cuts which led to less spending which led to less industry which led to more job cuts
US gov’t under Herbert Hoover believed that gov’t intervention should be minimal
Voters responded by electingFranklin Roosevelt
The Depression Spreads
FDR gave the gov’t a large role in ending the Great Depression called the New Deal Gov’t spending, not handouts, through gov’t
funded employment Regulations on the stock market and banks
to prevent the crash from every happening againThe New Deals was based off the philosophies of
English economist John Maynard Keynes Econ. downturn can be prevented by gov’t
spending Creates deficit spending (spending > income)
Al Capone used the Depression to gain support from people by opening soup kitchens
The Worldwide Depression
Economic problems in Europe before the Depression hit World relied on US industry Europe’s economy hurt by WWI Reparations made Germany in debt to
the Allies to the point that Germany Marks were worthless
Allies paid debt to US with reparation money
US invested in Germany so they could pay reparations
German reparations to Allies
Allied debt to
US
US investmen
ts to Germany
German Marks($) were so worthless it was better to burn them for than use them to buy fuel
The Worldwide Depression
Hawley-Smoot Tariff was a US attempt to save the US economy High tariffs to encourage Americans
to buy American-made goodsIt backfired by shutting down
international trade and makingthe Depression deepen & spread
The World Wide Depression
Many countries already politically unstable after WWI
The Depression resulted in social unrest and the formation of new, sometimes extreme, governments as people looked for a solution Nazis under Adolf Hitler take power in
Germany and blame Jews for the Depression
Mussolini used the Depression as an excuse to take absolute power in Italy
