The economy in the inter-war years
POST-WAR CRISIS
characteristics
high levels of debt
a shortage of products
because of loans from the United States intended to pay for the costs of war
due to the destruction of areas of agricultural land, factories and transport systems
Germany
France
one of the most severely affected countries
suffer the crisis and at the same time, pay war reparations :
the government circulated large quantities of bank notes
it meant that the German people needed large amounts of money to buy basic goods
hyperinflation
in 1923
realised that it would not receive the reparations it needed from Germany to help rebuild its economy
decided to occupy the richest and most industrialised area of Germany
the loss of this territory made the economic crisis in Germany worse
THE WALL STREET CRASH OF 1929
RECOVERY IN THE 1920S
the United States and Japan were the first countries to recover from the crisis
their industries had not been devastated by war
this situation enabled the United States to help European countries come out of the economic crisis
the United State
applied the Dawes Plan in Germany
in 1924
his was a series of economic measures which involved loans and American investment in German industry
the aim was increasing the value of the German mark
it also revised and reduced war reparations payments
from 1925 on
Germany's economy began to recover
the United States also helped other European countries
as a result
the world economy began to recover and grew steadily
by the mid-1920s
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the Wall Street stock market in New York collapsed
the causes
the increasing demand for shares led to a rise in share prices which caused stock market speculation
Agricultural overproduction
Speculation on the stock market and excessive bank credit
Industrial overproduction
during the First World War American industry had increased production in order to supply Europe
after the war the European industry recover and the American didn´t reduce their levels of production
the result was that the number of products available was greater than the number of products that were sold
companies lost money and some even had to close down
the American agricultural system had increased its production whuch had been possible due to
the cultivation of more land
the mechanisation of agriculture
after the war
European countries began to produce their own agricultural products but the level of American agricultural production maintained
the result
a surplus of production which caused prices to fall
during the period of prosperity
companies and individuals bought shares in companies on the Wall Street stock market because
they offered guaranteed profits
hen companies that sold shares on the stock market began to have problems, the shareholders wanted to sell their shares
thirteen million shares went up for sale which caused share value to fall dramatically due to oversupply
on 24 October 1929
this was the Wall Street Crash
the stock market crisis spread to banks and became a financial crisis
THE GREAT DEPRESSION OF THE 1930S
began with the Wall Street Crash of 1929 and continued for a decade
this economic crisis led to
put an end to the prosperity of the roaring twenties
a fall in prices
the consequences
Wages fell
The world economy was affected
Companies closed
there was a decrease in the standard of living
ue to a fall in sales and a lack of credit
unemployment increased
millions of people were forced to live off charity and government support
because the United States reduced imports
generating discontent with the liberal capitalist system