Impact of, and response to, the Great Depression, 1929-32

Question 1

1929

Answer 1

US economy collapsed and banks refused to renew short-

term foreign lending and called in loans from abroad.

Question 2

German industrialisation

Answer 2

German industrial production fell, slowly then rapidly.
Half of 1928 levels in 1932.
Unemployment rose, wages fell, prices fell.

Question 3

Grand Coalition

Answer 3

Grand Coalition parties were arguing and not cooperating. Government failed to cope with the Depression (could not make
decisions or act quickly).

Question 4

Bruning

Answer 4

Hindenburg resistant to more government by decree.
Coalition collapsed, replaced by Chancellor Brüning in 1930 who suggested cuts on government spending, wage cuts and higher
taxes; these policies were rejected by the Reichstag. Hindenburg went back to government by decree in July 1930 to enforce
Brüning’s policies.

Question 5

deflation

Answer 5

Brüning’s policies brought deflation and avoided devaluing currency. As Germany’s depression deepened, it was clear to all
countries that it could not meet reparation payments or repay loans.

Question 6

1 July 1931

Answer 6

Hoover Moratorium. International agreement suspended need for Germany to pay back loans or interest for a year.

Question 7

December 1931

Answer 7

Leading German trade unionists suggested a plan for job creation to boost economy.
Others suggested devaluing currency.

Question 8

Bruning’s response to December 1931

Answer 8

emergency decree for wage cuts, rent cuts and tax raises, said reparations would not be paid for the next year.
These policies did not work and deepened recession.
Industrial production fell, prices and exports fell, unemployment rose to highest ever level.

Question 9

May 1931

Answer 9

Brüning replaced by von Papen who introduced tax concessions and subsidies for businesses, created new jobs and improved
economy.
Government was caught up in political problems; hard to focus on economy and produce coherent policy.

Question 10

December 1932

Answer 10

von Schleicher is chancellor and appointed a Reich Commissioner for employment who drew up list of public
works to be financed by government to create employment.
Did not put anything to effect before Nazis came to power.

Question 11

coalition government failure

Answer 11

Coalition government failed and ruled increasingly by decree, made Weimar government look like a failure. Policies from decree
were hard on the German people and did not work; made government unpopular. Hindenburg stayed popular and chancellors and
ministers held responsible. Unpopularity led to popularity of extremists.