3.4 The Great Depression Flashcards
When was the Wall Street Crash?
1929
What was the Wall Street Crash?
An economic bubble in the US caused years of prosperity and people were rushing out to buy shares from companies that were making considerable profits and record production figures
The dramatic increase could not be sustained. By 1928, there was considerable overproduction in many industries, leading to declining sales and falling profits.
On October 24th 1929 (Black Thursday) share prices on the New York stock exchange began to fall rapidly causing people to panic sell their shares which led to further share prices falling and more panic selling. This continued for three weeks
Between 1929 and 1932, American industrial production fell by 45%
What effect did the Wall Street Crash have on Germany’s banking?
Loans to Germany ceased in 1929 and many American financiers began to call in their loans which led to a massive financial crisis because Germany did not have the money to repay the loans. Several major banks folded.
What effect did the Wall Street Crash have on German industry?
By the early 1930s there was little demand for products from German industrialists. The largest purchaser of German exports were the Americans and they put up their tariff barriers to protect their own companies. By 1932, German industrial production had fallen to just 58% of its 1928 levels
What effect did the Wall Street Crash have on German unemployment?
The effect of this decline was spiralling unemployment. By 1929, around 1.5 million Germans were without a job. Within a year, this figure doubled and by early 1933 a staggering 6 million (26%) were out of work.
What social effect did this have on Germany?
Diseases such as TB and pneumonia reappeared. Infant mortality increased. Children suffered the worst, thousands died of hunger and malnutrition.
Effects of the Wall Street Crash on: German People
Young people: In 1933, more than 50% of young people aged 16-30 were unemployed
Factory workers: 40% were unemployed. Unemployment benefits were reduced by the government
Farmers: Many farmers were in debt before the crash. This led to huge increases in support for the Nazis
Businessmen: Those who managed to keep their businesses still struggled because of the price of goods and the government rose taxes
Effects of the Wall Street Crash on: The Weimar Government
Weaknesses of the Weimar Coalition: The weaknesses became more apparent. The government failed to respond quickly to the crisis. Bruning (Centre Party leader) feared inflation and budget deficits more than unemployment and so he increased taxes and implemented wage cuts.
Who was Bruning?
Bruning became Chancellor in March 1930
Schleicher had convinced Hindenburg of this appointment and the cabinet excluded the SPD despite them being the biggest party.
How did Hindenburg and Bruning attempt to solve the problems of the Wall Street Crash?
Bruning had the support of President Hindenburg and he issued Bruning’s policies as emergency decrees.
