The Great Depression Chapter 28 (2 of 4). WW1 Ends, But Financial Problems Begin.

The Great DepressionChapter 28 (2 of 4)

WW1 Ends, But Financial Problems Begin

Hyper-Inflation

• Major inflation (rise in prices, decrease in money value) occurred in Europe after WWI, especially in Germany

• Inflation began largely because more money was printed to cover reparation payments

• Soon an inflationary mentality set in. • Merchants would raise prices

automatically. • People would hoard goods, figuring

the price would go up, thus causing shortages.

September, 1922

September, 1923

November, 1923

163 marks 1.5 million marks

200 billion marks

Price of a loaf of bread in Germany

Britain relied on exports and was slow to recover due to new

competition

Farmer Problems

• Overproduction from World War I

• Result = Prices go down

• Many give up farming and move to urban centers

Colonies Suffering

• Relied on export crops, but prices down

• Less money to buy goods so Europe hurt too

Governments React – Protective Tariffs

Black Tuesday – October 29, 1929

U.S. Stock Market Crashed

Great Depression Begins

Banks Fail

Soviets Isolated From Depression

• State ran economy• Didn’t trade with others

Japan Hit Hard• Relied on Exports• Luxury goods like silk not wanted• Grows more untrustworthy of West and

continued to expand

Welfare States Rise in the West (example: New Deal in U.S.)