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THE ECONOMY IN THE INTER-WAR YEARS (1918–1939), image, image, image, image…
THE ECONOMY IN THE INTER-WAR YEARS (1918–1939)
The economies of European countries and of the United States went through various phases
recovery in the 1920s
the Wall Street Crash of 1929
post-war crisis
the Great Depression of the 1930s
Post-war crisis
between 1918 and 1923
characterised by
high levels of debt
loans from the United States intended to pay for the costs of war
a shortage of products
destruction of areas of agricultural land, factories and transport systems
Germany
one of the most severely affected countries
it had to pay war reparations
hyperinflation
the German government circulated large quantities of bank notes, that were worth practically nothing
people needed large amounts of money to buy basic goods
In 1923, France took the Ruhr from Germany
The suffragist movement
the suffragist movement continued to protest against the inequality between men and women
they achieved the right to vote after the post-war period in some countries
Germany and Belgium in 1919
Czechoslovakia and the USA in 1920
Russia, Great Britain, Poland, the Netherlands and Austria in 1918
Recovery in the 1920s
The United States and Japan were the first countries to recover
The United States helped
Germany
the Dawes Plan
a series of economic measures
such as
American investment in German industry
loans
to increase the value of the German mark
revised and reduced war reparations payments
France agreed to abandon the occupied areas of the Ruhr in 1925
Thanks to this, Germany's economy began to recover from 1925 on
It was able to pay reparations to the victorious European countries
in 1924
Other European countries
by
selling the consumer goods they lacked
giving them loans
the roaring twenties
by the mid-1920s, the world economy began to recover
society changed
life was focused on enjoyment
new forms of entertainment
music-halls
ballrooms
cabarets
cinema
radio shows
consumerism grew again
sales of consumer goods increased
cars
household appliances
consumers also bought shares in companies on the stock market
The Great Depression of the 1930s
began with the Wall Street Crash of 1929 and continued for a decade
consequences
The world economy was affected
because
the United States reduced imports
countries adopted protectionist measures
There was a decrease in the standard of living
people blamed the capitalist system for the crisis
Wages fell and unemployment increased
Companies closed
because of
a fall in sales
a lack of credit
This economic crisis led to a fall in prices
The crisis soon spread to other parts of the world
because
the United States stopped investing
they asked other countries to repay the loans they had received after the war
The New Deal
they were a series of economic and social measures to try to stimulate demand
it was implemented by President Franklin Roosevelt in 1933
the measures
to limit agricultural and industrial production
to establish government control of the stock market and the banks
to carry out public works to create employment
to establish
disability insurance and old-age
widow's benefits to help alleviate the misery of the working class
a minimum wage and provide unemployment compensation
to give subsidies to agricultural producers
After 1938, the United States economy began to recover
The Wall Street Crash of 1929
this was the beginning of a major economic crisis
leading to the Great Depression of the 1930s
causes
Agricultural overproduction
during the war, the American agricultural system had increased its production
thanks to
the cultivation of more land
the mechanisation of agriculture
after the war, European countries began to produce their own agricultural products again
the level of American agricultural production was maintained
the surplus caused prices to fall and farmers were ruined
Speculation on the stock market and excessive bank credit
companies and individuals bought shares in companies
because they offered guaranteed profits
to buy things both people and companies obtained credit or loans from the banks
Industrial overproduction
during WW1, American industry had increased production to supply Europe
after the war, European industry started to recover
countries bought less from the United States
American industry did not reduce levels of production
as there was more supply than demand, companies lost money
some had to close and unemployment increased
The increasing demand for shares led to a rise in share prices
the share value did not reflect the real value of the companies, which were bankrupt or in financial crisis
companies that sold shares on the stock market began to have problems
the shareholders wanted to sell their shares
The Wall Street Crash
On 24 October 1929, thirteen million shares went up for sale
this caused share value to fall dramatically
it also affected banks
as found themselves without liquidity
because the investors, who could not sell their shares, did not have the money to pay back their loans
people tried to withdraw their savings from the banks to avoid losing them
of 23000 banks, 5000 closed
