Impact of the Depression of 1929

Question 1

Summarise the steps that led to the German economic collapse

Answer 1

• to re-stabilise the Geran economy following hyperinflation crisis, settles the Dawes (1924) and (1929) Plans. Plans result in Germany being loaned 25.5 billion marks to aid recovery.
• American economy in Oct 1929 following the Wall Street Crash collapsed.
  -> economy was especially vulnerable since it was propped up by foreign capital, mostly loans from America, and was very dependent on foreign trade.
• German businesses which had relied on bank loans did not have enough money to sustain their production and pay their workers.
• Unemployment increased, German people had less money to spend, and the demand for consumer goods/products dropped.
• With many businesses and individuals unable to pay back their bank loans, a number of German banks collapsed and people lose their money and savings.
• The German economy spiralled into an economic depression.

Question 2

What was the Wall Street Crash’s impact on German banking (economic)

Answer 2

• Banks stop lending.
• May 1931 collapse of an Austrian bank leads to collapse of German banking.
• July 1931 Government close banks and stock exchange for 2 days to prevent complete collapse, but respite temporary.

Question 3

What was the Wall Street Crash’s impact on employment (economic)

Answer 3

• unemployment put enormous pressure on the otherwise generous welfare provision.
  -> Steps were taken in 1930 to reduce unemployment benefit which put more pressure on local authorities.
• 1929 = 1.5 million, 1933 = 8 million.
• was worse in industrial areas: Ruhr, Silesia, ports.
• white collar workers were hit by cuts in vicil service: those who didn’t lose their job faced wage cuts.

Question 4

What was the Wall Street Crash’s impact on agriculture (economic)

Answer 4

• Was already in the throes of a depression before the Crash:
• Global grain surplus and price slump in 1925-26.
• 1928 German farmers involved in small-scale riots – dubbed the ‘farmers’ revenge’ – in protest against foreclosures and low market prices.
• Unemployment grew esp among farm workers.
• By 1929, agricultural production < ¾ pre-war levels.

Question 5

What was the Wall Street Crash’s impact on German industry (economic)

Answer 5

• By 1928, German economy stagnant, but reliant upon US for loans and markets.
• Recall of US loans came at worst possible moment.
• Demand for German goods collapsed, with the US imposing tariff barriers in 1930.
• 1929-32 export trade fell by 61% and industrial production by 58% of 1928 level.
• Companies went bankrupt and unemployment rose.
• Companies that survived cut wages and working hours.

Question 6

What was the Wall Street Crash’s impact on welfare (social)

Answer 6

• The costs of welfare soon overwhelmed the budget.
• Welfare was delegated locally and means tested.
• Women received less than men, and young people less than adult.
• Areas which depended on one industry experienced unemployment on a larger scale.
• Mass poverty was on the rise, along with disease, such as ricketts which were caused by malnutrition.
• As unemployed people were evicted, tents and shanty towns started to appear.

Question 7

What was the Wall Street Crash’s impact on the youth (social)

Answer 7

• Unemployment among young males reached 39%.
• Young men began to congregate in public as they had nothing to do.
• The number of 14-25 year olds accused of crime rose.
• Youths were charged with offenses against the state and threatening behaviour.
• The number of young men involved in extremist organisations increased.
  -> The Hitler Youth offered food, uniforms and shelter.
  ->Girls and women were barely every involved in these groups.
• Bruning introduced emergency labour schemes and voluntary schemes to occupy people.
  -> The main aim was to get people “off the streets”.
  -> In the long term the schemes accomplished little.

Question 8

What was the impact of the Wall Street Crash on women (social)

Answer 8

• in some ways, women weathered the effects of the Depression better than male counterparts.
  -> female proportion of the total workforce increased during the Depression years.
• the onset of depression and the dismissal of many millions of workers from their jobs reignited the debate about whether married women should continue to be employed when males were out of work.
• campaign waged by right-wing parties against the employment of so-called ‘double-earners’ achieved some success in May 1932 when a law was passed allowing married women civil servants to be dismissed.
• After the law was passed, the Reich Postal Service dismissed about 1000 married women from its employment.
  -> The cause of equal rights for women, therefore, suffered a serious setback during the Depression.

Question 9

What was the political impact of the Wall Street Crash

Answer 9

• Unemployment benefit, falling tax revenues and slowing global trade placed a strain on the Weimar Government’s finances.
• The DVP wanted to reduce unemployment benefit, while the SPD wanted to raise taxes, splitting the Coalition. In March 1930 Muller resigned.
• Bruning was appointed by Hindenburg - Bruning was the leader of the Centre Party.
  -> Two key army figures, Groener and Von Schleicher were instrumental in his appointment. These army men wanted a return to authoritarian government.
• Hindenburg hated democracy, and now Bruning also had authoritarian leanings.
• Bruning’s coalition excluded the SPD, which meant that no laws could get passed. Governments had to rely on presidential decree to get anything done.

Question 10

What were Chancellor Bruning’s policies towards managing the economic crisis

Answer 10

• Bruning thought the best method was to adopt a policy of deflation (reducing the prices of goods and services to reduce government spending).
• thought that if state avenue declined, state expenditure had to also be cut.
• Bruning used an emergency decreee to introduce wage cuts, rent cuts and tax rises.

Question 11

What was the impact of Bruning’s policies

Answer 11

• one of the few benefits of his policy was that as depression deepened, it was clear to other countries that it would not be able to meet reparations or repay loans.
• July 1, 1931, the Hoover Moratorium suspended the need for Germany to pay back loans for a year.
• to boost the economy, others suggested a plan for job creation, as had happened in the US, or devaluing the Reichsmark to make German goods cheaper and to increase demand for these goods abroad.
• Instead, Bruning’s policies deepened the recession between 1930 and 1932.
• Industrial production fell, prices fell and exports fell, all by around 50%.
  -> Unemployment rose to its highest level ever in 1932.

Question 12

What were Von Papen’s policies towards the managing the economic crisis

Answer 12

• In May 1932, Bruning was replaced by von Paren who introduced some tax concessions (discounts) and subsidies (financial support) for businesses that created new jobs and helped to improve the economy.
  -> However, by then, the government was caught up in political problems which made it increasingly difficult to focus on the economy and produce a coherent policy to bring about economic stability.

Question 13

Explain the September 1930 election and how this resulted in another political crisis

Answer 13

1. Bruning was an authoritarian chancellor who had been appointed by Hindenburg.
2. he did not have majority support in the Reichstag to get this budget through.
   -> therefore he persuaded Hindenburg to use article 48 to get it passed.
3. This provoked a political crisis. Article 48 was only supposed to be used in an emergency, not normal political business.
4. The SPD won enough votes to demand that the decree be withdrawn -> this causes another political crisis.
5. Bruning dissolved the Reichstag and called an election in 1930.
   -> Bruning’s response to the Depression was to cut expenditure and to raise taxes.

Question 14

What was the impact of the 1930 election (results)

Answer 14

• extremist parties of the left and right gained the most in the 1930 election.
  -> communists gained over a million votes, mostly from the SPD, and 77 seats in the Reich.
• 1928, nazis received a mere 810,000 votes, whereas in Sep 1930, they gained 6.5 million votes and their representation in the Reichstag increased from 12 to 107 seats, making them the 2nd largest party.
• From this breakthrough in Sep 1930, support for the Naxos continued to grow.
  -> moreover, with 107 deputies in the Reichstag, the Nazis had the opportunity to disrupt its proceedings through chanting and interrupting.
• as the Reichstag became unmanageable, its proceedings became more irrelevant -> did not meet at all between February and October 1931.

Question 15

Explain the violence during the years of 1930-33

Answer 15

• Nazis and communists (communists with Red-Front Fighters’ League) took political struggle to the streets.
• each side attempted to break up the political meetings of their opponents and rival marches often degenerated into full-scale riots -> this violence was particularly severe at election times.
• In April 1932, Hindenburg signed a decree outlawing the SA -> even this ban failed to curb the activities of the Stormtroopers.
  -> membership continued to grow and political violence was not brought under control.
  -> By the end of 1932, the SA was estimated to have 400,000 members.§