Chapter 15 Section 1: Aftermath
Isolated France
-Betrayed by U.S. and G.B.
-Security:
1. ENFORCE TREATY
2. Alliance with Poland and Czech
Enforcing the Treaty
-Bill: Total 132 Billion Gold Marks, Payable: 2.5 Billion/ Year
-1921 Weimar Republic Pays 1st Installment
-Paid in coal, iron, and wood
-1922 Weimar Republic REFUSES TO PAY AGAIN
invade Ruhr
-German Industrial District
-Germans went on strike
-Paid no reparations
-No Industrial Production
-Crippled German Economy / /
“Hands off the Ruhr”
German Hyperinflation:
-1914 4.2 Marks : 1 U.S. Dollar
-1923 4,200,000,000,000 Marks :
1 U.S. Dollar
1. Overprints paper money
2. Finance and Deficit From WWI
3. Reparations
4.A French
invasion of Ruhr
4.B Germany’s
passive economic
resistance / /
A NEW HOPEIn Foreign Affairs: ECONOMICS
-Economics: Dawes Plan
-German reparations reduced
-U.S. loaned money to Germany, who paid France and Great Britain, who paid U.S. back
A NEW HOPE In Foreign Affairs: Foreign Policy
-Locarno Agreement
-Germany and France peaceful border agreements
-Britain and Italy agree to attack German or French Aggressor against other
-Kellogg-Briand Pact
-15 nations symbolically denounce war as instrument of foreign policy
Great Depression
-Worldwide Economic Depression
-From 1929-1939
EUROPE FINANCIALLY TIED TO AMERICA
-American Industry “ROARED” in the 1920’s
-European Industry stalled
-American banks and investors became leading creditor to Europe (ESPECIALLY TO GERMANY)
Economic Crisis in America
1. Crash of American Stock Market 1929
-Buying on Speculation
-Pay 10% to own stock
-False rise in stock prices
-Prices eventually drop
-Panic Liquidation, Prices Plummet, Market Crashes
2. Bank Crisis
-Stock Market Crash Loss confidence in banks
-Massive withdraws cause banks to fail
-Failed banks cause more massive withdraws
3. Lack of Money
-People Stopped Spending Money
-Banks Had No Money to Loan
-Production and Prices Plummeted
-Unemployment Skyrocketed
Crisis Spreads to Europe
-American Investors/Banks recall foreign loans/investments
-Europe Loses Money
-Production Plunges
-Employment Plummets
***ECONOMIES WERE SUFFOCATING FROM LACK OF MONEY***
John Maynard Keynes “Priming the Pump”
-Key: SPEND DON’T SAVE
-Governments must RAISE SPENDING and RUN DEFICITS TO STIMULATE ECONOMY
-Increase Demand/Spending Increase Production Increase Employment
New Deal in United States
-Election of Franklin Delano Roosevelt
-New Deal in United States
-Increased Agricultural Prices (Decreased Agricultural Production)
-Public Works Programs
-Employed 20% of American Labor Force
-Built Infrastructure and Public Works
-Social Security
-Helped U.S. manage Depression, Not Fix It