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The economy in the inter-war years - Coggle Diagram
The economy in the inter-war years
Post-war crises
characterised by
a shortage of products
destruction of areas of agricultural land, factories and transport systems
consequence
increase in prices
high levels of debt
because of loans from the United States intended to pay for the costs of war
most affected country
Germany
at the same time
pay war reparations
as France didn't receive the reparation
occupied the Ruhr, riche and industrialised area in 1923
Germanies industrial production fell
prices rose excessively
crises
hyperinflation
German government circulated large quantities of bank notes that worth practically nothing because they had no gold
Recovery in the 1920s
In 1924 Dawes Plan
the United States in Germany
aim
increasing the value of the German mark
revised and reduced war reparations payments
France
abandoned the Ruhr in August 1925
econimic measures
loans
American investment in German industry
1925 on
Germany was able to pay reparations
European countries were able to pay back their loans
United States helped other European countries
by the mid-1920s
the world economy began to recover
roaring twenties
Economic prosperity
new form of entertaining
cabarets, music-halls, ballrooms, radio shows and cinema
Hollywood film stars emerged
Greta Garbo
Charlie Chaplin
Rudolph Valentino
Consumerism grew
cars and household appliances increased
The wall street crash of 1929
causes
Speculation on the stock market and excessive bank credit
companies and people
bought shares in companies on the Wall Street stock market
as they offered guaranteed profits
they obtained credit or loans from the banks
to buy houses, machinery or land
Industrial overproduction
during the war
American industry increased production
supply Europe
After the war
European industry recover
less demand
Result
supply was greater than demand
unsold products accumulated in warehouses
Companies lost money
some had to close down
consumption decreased
Agricultural overproduction
during the war
American agricultural system had increased its production
send large quantities of food to Europe
after the war
Europe began to produce their own agricultural products
level of American agricultural production was maintained
Result
surplus of production
prices fall
factories closed
increase in unemployment
demand for agricultural products decreased
farmers were ruined
increase demand for shares
led to a rise in share price
causing stock market speculation
shares
bought in order to make quick profits
didn't reflect the real value of the companies
which were bankrupt or in financial crisis
shareholders wanted to sell their shares
24 October 1929
thirteen million shares went up for sale
share value fall dramatically
due to oversupply
stock market crisis spread to banks
they had no liquidity
as investors didn't have the money to pay back their loans
they collapsed
millions of citizens were ruined
The Great Depression of the 1930s
consequences
Wages fell and unemployment increased
economy was affected
United States reduced imports
other countries
adopted protectionist measures
to save national production
Companies closed
Banks collapsed
lack of liquidity
decrease in the standard of living
