The 1920s saw economic problems in Europe including high unemployment, rising prices, and Germany's inability to pay war reparations which led to inflation and declining living standards. The Great Depression began in the late 1920s due to overproduction, low agricultural prices, and stock market speculation. It worsened in 1929 with the crash of the US stock market, causing banks to fail, industry to decline, unemployment to rise, and economic recession around the world. The Depression had international consequences as US banks withdrew money from Europe.

1. The Roaring Twenties

4. EUROPE

5. Problems
High unemployement
Rising prices
War loans
Germany was unable to pay war compensations:
o Massive inflation
o Unemployement
o Decline in the population’s standard of living

6. SOLUTIONS
Daws plan: Loans to Germany
Locarno Treaties:
oRenegotiation of Germany’s
debts
oSet up the borders of Europe

7. The Great Depression

8. Great Depression
o Overproduction. The production increased a lot since Europe
imported American goods in WWI.
 However, after its end the demand decreased, although the production did
not.
 Prices and profits halted in 1926, but the production went on.
o Low prices of agricultural products. Many farmers went bankrupt
and could not buy anything.
o Speculation. Profits had been really high between 1921 and 1926.
 Many people bought shares since it could not be invested in industry since
there was overproduction.
 The quote of shares was did not match their actual worth.
 Loans were easy to get. Hence, more shares were bought.

9. Great Depression
Why?
Share’s prices were
higher than their real
value

10. Great Depression

11. Great Depression
People were panicked since they could not buy any share in the New York Stock Exchange.
o On Black Thursday (24 October) shares were massively sold in that
marketplace.
o On Black Tuesday (29 October) the sale of shares was complete and economy
collapsed:
 More than 5,000 banks had to close due to those loans they had previously granted
and they could not get back. Moreover, many people withdrew their savings from the
banks.
 Industry was severely affected since demand decreased and they had lots of stocks;
hence prices decreased.
 Many people went unemployed and many farmers were completely unable to pay
back their loans.
 The most affected countries by the Crash were the USA, Germany, and Japan.

12. The Great Depression
Results:
General Economic
recession:
 Unemployement
 Consumption fell
 Companies closed down

13. The Great Depression
International consequences:
U.S. banks withdrew their money from Europe (they asked
for their loans)

14. Solutions
NEW DEAL
Problems in Europe