Summary 5 - Why did the government not act decisively to tackle the economic slump? Flashcards
What was the widespread international belief regarding the ability of governments to solve the solve the depression?
There was a widespread international belief that governments were fairly powerless regarding their ability to solve the depression.
When did Muller’s coalition collapse due to the inability to agree on the best strategy to solve the depression?
March 1930
What was the government terrified of?
The government was terrified of a repeat of hyperinflation.
What was the impact of the governments dear of a repeat of hyperinflation?
The government kept the rate of government spending on welfare and public works low as they thought this was the cause of inflation.
How did the legal restrictions on the Reichsbank (as a result of Dawes and Young Plans) hamper the ability of the government to respond to the depression?
The government was not able to print more money or devalue the currency thus could not not increase government spending.
Why did the government find it difficult to acquire loans?
Not many banks trusted the long term finances of Germany or the ability of the government to manage them.
Why did Bruning, who was Chancellor between 1930 and 1932, actively allow the financial crisis to worsen?
He allowed the financial crisis to worsen in order to try and get reparations cancelled.
What was the governments initial strategy in response to the depression?
They reduced government expenditure due to the reduced amount that the government received in taxation because of a fall in industrial production.
They raised taxes to help balance the budget.
What did Bruning do to try and reduce unemployment during the depression?
Bruning set up some public work schemes.
What did Von Papen do to try and help the poor through the depression?
He looked at allocating unused land to the poor.
How effective was the governments response to the depression?
The government did not intervene enough and there was a lack of support given to those in need. Although they became more interventionist towards the end of the depression, it was too late.
