Worldwide Economic Struggles in the Interwar Period
Summary
TLDRThis video explores the global economic struggles during the interwar period, focusing on Germany's post-WWI financial crisis and the Great Depression. It covers Germany's hyperinflation, caused by war reparations and printing excess money, and the temporary relief brought by the Dawes Plan. The Great Depression, triggered by the 1929 U.S. stock market crash, spread worldwide, causing unemployment and economic downturns. Countries responded with policies like protectionism, increased regulation, and deficit spending. The video highlights how these efforts, including Roosevelt's New Deal, helped alleviate the crisis but only World War II ended the depression.
Takeaways
- 🌍 Germany faced severe economic challenges after World War I due to huge reparations payments, leading to hyperinflation.
- 💸 Printing more money to solve inflation worsened the value of the German mark, making it almost worthless by 1923.
- 🔥 In some cases, German citizens used money for fuel because it had become more valuable as material than currency.
- 📉 The Dawes Plan of 1924 aimed to ease Germany’s financial burdens by reducing reparations and providing American loans, leading to a short period of recovery.
- 📜 The Treaty of Locarno and Germany's entry into the League of Nations temporarily improved its international standing in the late 1920s.
- 📊 The Great Depression, beginning in the U.S. with the 1929 stock market crash, led to worldwide economic downturns.
- 🚜 Agricultural overproduction, particularly of wheat, drove down prices and contributed to the Great Depression.
- 📉 As U.S. investors withdrew capital from Europe, many banks and industries collapsed, deepening the depression.
- 🏛️ Governments responded to the crisis by increasing economic regulations, moving away from previous laissez-faire policies.
- 🇺🇸 In the U.S., Franklin Roosevelt's New Deal created programs aimed at economic recovery, although it was ultimately World War II that ended the Great Depression.
Q & A
What economic problems did Germany face after World War I?
-Germany faced severe financial problems due to reparations payments required by the Treaty of Versailles, which amounted to the equivalent of half a trillion dollars in today’s money. This led to inflation and a devaluation of the German mark, making the currency nearly worthless.
How did Germany initially respond to its financial crisis in the early 1920s?
-Germany responded by printing more money, which worsened the inflation problem. The German mark lost value rapidly, leading to hyperinflation where the currency became essentially worthless.
What was the Dawes Plan, and how did it help Germany?
-The Dawes Plan was an arrangement where reparations payments were reduced, and loans were provided to Germany by American banks. This helped stabilize the German economy temporarily and allowed Germany to repay the Allies, who in turn repaid their debts to the United States.
What caused the Great Depression, and how did it spread worldwide?
-The Great Depression was triggered by several factors, including economic downturns in individual nations, agricultural overproduction, and, most significantly, the U.S. stock market crash of 1929. It spread globally as U.S. investors withdrew their money from Europe, leading to bank collapses and economic declines in several countries.
How did countries attempt to respond to the Great Depression?
-Countries responded by cutting costs, raising tariffs to encourage domestic production, and implementing greater government regulation. However, these measures often worsened the crisis, as international trade decreased, production declined, and unemployment rose.
What was the New Deal, and how did it aim to address the Great Depression in the United States?
-The New Deal was a series of government programs introduced by President Franklin D. Roosevelt. It focused on government intervention, creating jobs, regulating businesses, establishing a social security system, and insuring banks to restore confidence in the financial system.
Why did the New Deal not completely end the Great Depression in the United States?
-While the New Deal alleviated some of the pressures from the Great Depression, it did not fully resolve the crisis. It was only with the outbreak of World War II and the subsequent increase in production that the U.S. economy fully recovered.
How did the Great Depression influence political movements in Europe?
-The Great Depression led to a loss of confidence in democratic governments, particularly in countries like Germany and Italy. As a result, people turned to political leaders who offered simple solutions to complex economic problems, such as Mussolini in Italy and Hitler in Germany.
What impact did the Great Depression have on agricultural production and prices?
-Agricultural overproduction, particularly of wheat, caused prices to fall, leaving farmers unable to earn enough to sustain their operations. This further worsened the economic situation, especially in rural areas.
What role did the stock market crash of 1929 play in the onset of the Great Depression?
-The stock market crash of 1929 was a key event that led to the Great Depression. The collapse in stock prices caused widespread financial losses, leading U.S. investors to pull their funds from Europe, causing banks to fail and exacerbating the economic downturn in both the U.S. and Europe.
Outlines
🌍 Economic Struggles in Germany After WWI
This paragraph discusses the economic challenges Germany faced after World War I, including paying massive reparations. In response to Germany stopping payments, France occupied the Ruhr Valley. Germany tried to manage its inflation by printing more money, which only worsened the issue. By 1923, the German mark had become almost worthless, leading to stories of hyperinflation, such as people burning money for warmth and using wheelbarrows to carry their salaries. The Dawes Plan, introduced by the U.S., helped reduce reparations and provided loans to Germany, leading to a brief period of recovery in the late 1920s.
📉 The Onset of the Great Depression
This paragraph introduces the Great Depression, a period of low economic activity and rising unemployment, which began in the United States and spread worldwide. Key causes include economic downturns in various nations, agricultural overproduction, and the 1929 U.S. stock market crash. As U.S. investors withdrew their funds from Europe, banks collapsed, trade declined, production dropped, and unemployment soared, leading to the worst economic depression in modern history. Countries struggled to respond, with many enacting policies that only worsened the crisis.
🛠️ Global Responses to the Great Depression
Governments around the world struggled to address the economic devastation of the Great Depression. Traditional approaches, like cutting costs and raising tariffs, only deepened the crisis. In response, many nations, including the U.S. under President Franklin D. Roosevelt, began regulating their economies more heavily. The New Deal in the U.S. introduced policies like public works programs and social security to restore confidence. Meanwhile, Marxist ideas gained traction among workers, and in countries like Italy and Germany, leaders like Mussolini and Hitler rose to power by offering simple solutions in exchange for authoritarian control.
🇺🇸 U.S. Efforts and the Rise of Deficit Spending
The final paragraph focuses on how different nations responded to the Great Depression. France experienced political instability, Britain saw the Conservatives take power, and the U.S. implemented Roosevelt’s New Deal. This program involved government intervention, such as creating jobs, setting up welfare, and establishing Social Security. While the New Deal alleviated some economic pressure, it didn’t fully end the Depression. It was the outbreak of World War II that ultimately pulled the U.S. out of the Depression as industrial production surged to support the war effort.
Mindmap
Keywords
💡Great Depression
💡Reparations
💡Hyperinflation
💡Dawes Plan
💡Stock Market Crash of 1929
💡New Deal
💡Laissez-faire
💡Agricultural Overproduction
💡Weimar Republic
💡Tariffs
Highlights
Germany faced severe financial problems after World War I due to reparations, leading to hyperinflation.
France occupied the Ruhr Valley in response to Germany stopping reparation payments, leading to tensions.
Germany attempted to solve its financial issues by printing more money, causing hyperinflation and rendering the German mark nearly worthless.
By 1923, the German mark had collapsed, with 120 billion marks equal to one U.S. dollar.
The Dawes Plan provided U.S. loans to Germany, helping it recover temporarily from the economic crisis.
Germany's temporary recovery in the late 1920s included joining the League of Nations and signing the Treaty of Locarno.
The Great Depression began with the 1929 U.S. stock market crash and spread worldwide, leading to rising unemployment and economic collapse.
Agricultural overproduction in the U.S. and other countries caused falling prices, worsening the economic downturn.
The U.S. stock market crash in 1929 triggered the withdrawal of investments from Europe, further destabilizing economies.
Countries responded to the Great Depression by cutting costs, raising tariffs, and increasing government regulation, but these measures often worsened the situation.
The New Deal in the U.S., led by Franklin Roosevelt, introduced government intervention in the economy to create jobs and establish social welfare programs.
The Great Depression led to renewed interest in Marxist ideologies and communism, especially among workers and intellectuals.
In countries like Germany and Italy, people supported political leaders like Hitler and Mussolini who offered simple solutions to the crisis.
The Weimar Republic in Germany faced economic and political instability during the Great Depression, leading to a crisis of confidence in democratic governments.
The New Deal did not fully end the Great Depression, but World War II eventually revived industrial production, helping the U.S. and other nations recover.
Transcripts
hey world civilizations mr lasseter with
you today
and we're going to be looking at
worldwide economic struggles in the
interwar period
basically this is a fancy way of saying
we're going to look at
economic problems and the great
depression
between world war one and world war ii
here are video goals for today we want
to look at what economic troubles face
germany after world war one
and also look at how they overcame them
albeit temporarily
we want to find out what the great
depression was and
more importantly how countries responded
to the great depression
take a look at our vocabulary we will
make sure we understand what all these
terms are by the end of the video
so let's start with economic troubles
that face
germany after world war one
keep in mind that germany had to pay uh
the equivalent of something like half a
trillion dollars in today's money
uh as reparations for the war and they
began
paying these in 1921.
understandably this caused severe
financial problems
and these were evident excuse me by the
next year
france in response to germany stopping
their payments decides
to occupy a part of germany called the
rural rur valley
uh and so they took over the mines and
factories there
in order to try to make some of the
money that reparations
uh should be should be sending their way
um and so this was this was kind of
controversial it was um
certainly not ideal in what
everyone wanted to be a peaceful world
germany dealt with some of their
problems and their
their in the inflation that was starting
in german they dealt with it by printing
more money um but hopefully you know or
maybe you'll know
now that printing more money does not
solve financial problems
in fact it makes the money that's
already out there worth
much less so pretty soon the german mark
which was their their uh form of the
dollar
was pretty much worthless and inflation
ran absolutely wild
in 1914 when world war one started
it took 4.2 marks to make one u.s
dollar so basically a mark was about
equal to a quarter
by 1923 it took a 120
billion marks to every u.s dollar
and by the end of that year it was
something like a trillion so
keep it basically was simply worthless
in fact in this image you can see a
woman
burning her worthless money for heat
because
it just simply won't buy anything
the note that you see at the bottom
there is a
50 million mark note but as we know by
the end of 1923 that would not even be
worth
one dollar there are also other stories
for example
people getting paid and having to carry
their pay home in wheelbarrows because
they had so many of these
marked notes um but they had to they had
to
um they were they were worthless so they
had paid so many more
it would just you know what have you um
there's another story
whether true or not i think it's a funny
story that a woman
uh was was paid had her money in a giant
bucket outside her house and just
left and left it there and when she came
back the money was still there but the
bucket was missing
because the bucket was more valuable
than the currency
but these economic troubles of course
are going to lead to political troubles
as well in germany
so the world kind of gets together and
some people in the united states come up
with
a plan to help germany and this becomes
known as the dawes
plan and it basically reduced
reparations
and planned out how germany could pay
back these other nations
it also provided loans from american
banks to germany
to help them through the situation and
you see here to the right
uh the dawes plan basically the allies
owed a lot of money to the united states
the united states then provided a lot of
loans to germany
who intend could pay back the allies um
so this was
this was the plan to kind of help
germany through the situation
and so it leads to a brief period of
recovery and prosperity in
in germany uh in the latter half of the
1920s
in addition to this germany and france
ended up signing the treaty of lucarno
which settled their western border
disputes
and germany even joins the united the
league of nations
and later 63 nations decide to renounce
war as an instrument of national policy
so these are all things that were
pointing to
to kind of what might be a really good
situation in the world
they had overcome some problems about
the end of the 1920s a decade after the
war
man things are looking good but that
prosperity is going to be short-lived
and the reason being is because on the
horizon is the great depression
now depression is a period of low
economic activity
and rising unemployment in a nation
um and usually it's kind of for a
prolonged time period
the great depression with capital g
capital d
here begins in the united states and it
will spread
worldwide and there are several major
causes which you need to know
first of all there are several downturns
in the economies of individual nations
so just struggles is
demand goes down for certain goods and
so people are not buying as much
and if people are not buying as much
then that might lead to a company
cutting jobs and more people becoming
out of work
secondly agricultural overproduction
especially of
wheat causes falling prices in the
united states and in other nations
and so farmers are not able to get the
prices they need
for their their uh for their uh
agricultural products
and when this happens that that can
cause an
even greater uh struggle is now the
farmers don't have enough money to buy
the things they need
and becomes a chain reaction but the big
monumental event that caused this great
depression
is the crash of the united states stock
market in 1929.
so the united states had kind of
believed in the stock market and that it
was going to keep going up and
up and up and up and then finally
it tumbles and so the u.s economy
crashes
and u.s investors then in order to try
to gain some money back
and help themselves out over here in the
u.s withdraw
their investments from germany and other
european states
and because these investments are
withdrawn those nations become
weakened major banks collapse in several
countries
including the united states people make
a run on banks and try to get all their
money out and they basically can't
and as a result of this we see all these
nations trying to take measures
to to fix the problem and so trade
decreases between nations
as they try to uh instead of importing
goods from other countries they try to
make them at home
production is going to decline because
people don't have the money to buy these
goods
and unemployment is going to rise
all of these things combined uh really
make the great depression the the worst
depression
in in history or in our
recent history so what were some of the
responses to the great depression
well for the most part countries in
europe and the united states had
experienced depressions before but they
had never
experienced one quite as bad as this and
so
governments didn't know how to deal with
this crisis they try to cut costs
they try to raise tariffs to encourage
goods being made
within their countries but that only
makes the economic
crisis worse so governments then begin
to
increase economic regulation and this
can be seen in the united states as fdr
passes or puts through the new deal and
creates policies for
regulation of businesses etc and this
was a big
change because for the most part many of
these european nations and the united
states had practiced
a hands-off laissez-faire policy
there was also in these countries a
renewed interest in those
marxist ideals of communism
um and so these march 6 marxist
doctrines um came about or
were especially championed by workers
and intellectuals
who hoped that this would create a more
equal society and solve the financial
crisis
and in some countries like italy and
germany
and argentina and brazil masses of
people begin to
follow political leaders who offer very
simple solutions
in return for a lot of power and this is
scene with mussolini
and hitler especially
so what of these democratic states after
world war one how did they deal with
this crisis and what was
what was happening um so in the 1920s
keep in mind europe seemed to be
returning to trends of parliamentary
democracies and the growth of individual
liberties
they kind of passed this time period of
kings and chancellors
and hugely large powerful leaders
and that journey was not an easy process
for example in germany the weimar
republic you see the the enzyme of it
there
faced a lack of leadership they had
didn't have really strong political
leaders
and of course all these economic
problems germany was hit hardest
by the depression in france they also
had many problems from this great
depression
in fact they had several reforms that
were pushed by communist socialists and
radicals in their country
they formed six different cabinets
trying to solve
economic issues and so it really leads
to a crisis of confidence
in those governments in great britain
the party in charge the labor party fell
out of favor and the conservatives come
into power in britain they try to
balance the budget
they set up protective tariffs and try
to wait out this depression
but the one you might be most familiar
with is the united states
whereas industrial production fell by 50
percent in
unemployment skyrocketed to about 12
million people
the united states turned to a democratic
president
franklin roosevelt who set up a program
of government intervention and this was
known as
the new deal it put people to work
and established a welfare system
established a social security system
it established bank holidays and it set
up insurance
for uh the elderly it set up bank
insurance to protect
uh people's money in uh in the banks so
the fdic which insured everyone's money
up to i think nowadays it's like 200 000
or something along those lines but this
was to get people more
confident in the government and to put
people to work
that was the big idea and so they
actually spent more money than than the
u.s had in his treasury it was called
deficit spending
we may talk more about that in the
future
so these all kind of alleviated the
pressure in the united states
from the great depression but it would
really take world war
ii to pull the united states out of the
depression completely
so the new deal does not end the great
depression but it kind of gets the us
through it when world war ii breaks out
production in the united states
will begin to grow again and the united
states
will exit world war ii along with many
other nations
exit the great depression excuse me here
are your video goals make sure you get
them
and have a good day
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