The Great Depression and the Wall Street Crash and its impact on Weimar Flashcards
Where were most peoples banks in 1929?
-America
When was the Wall Street Crash?
-24th October 1929
What was the Wall Street Crash?
-on ‘Black Tuesday’ 24th October 1929 13 million shares were sold
-panic selling made things worse-> sent pries even lower
-shares worth 20,000 in the morning were worth 1,000 by the end of the days trading
-within a week investors lost 4,000 million
Why was Germany affected by the Wall Street Crash and the Great Depression?
-the Dawes Plan 1924->the USA lend money to Germany to boost the economy->Germany pays reparations to Britain and France and develops industry at home-> GB and France pay money back to the USA from loans accrued during WW1
How did the crash spread to Germany?
-USA recalled the loans made to Germany under the Dawes Plan in 1924->left Germany with no money
-many German companies (eg Krupps and United Steel works) relied on American investment
-most American loans were short term and renewed on a monthly basis->they could be cancelled or recalled with minimal warning
-Germany did not need to produce so much so factories closed and employers sacked workers
-by 1932 industrial production had dropped to 49% of its 1929 value-> also affected German farmers who were not in a good position to start with
How much had industrial production dropped by 1932?
-by 1932 industrial production had dropped to 49% of its 1929 value
What were social impacts of the Wall Street Crash?
-many people became unemployed or/and lost most or all of their savings
-middle classes lost the most->their savings, companies and homes
-unemployment rose->demand for domestic goods fell as people could not afford to buy things-> unemployment rose further-> created another vicious circle and undid Stresemann’s hard work
-by 1932 6 million were unemployed
-the unemployed roamed the streets and some joined private armies of the political parties-> violent clashes became common-> way of escaping frustration of unemployment
-the government made as many of its employees redundant as possible and cut the salaries of those who remained->people lived in fear of loosing their jobs
What were the issues with the unemployment benefit system?
-only designed for 80,000 so couldn’t cope with the huge numbers who needed benefits by 1932
How many people were out of work by 1932?
-6 million->20% of the total German population which was 13 million
What were economic impacts of the Wall Street Crash?
-banks were major investors in shares and suffered huge losses ->German banks lost so much money that people were worried they would not be able to get their money out of the bank->people rushed to get their money back and some banks ran out of cash
-caused worldwide depression so it was difficult to sell goods abroad-> further problems for Germany’s economy
-right wing parties, middle class and the wealthy opposed the idea of raising taxes to pay for unemployment benefit->left wing parties and the working classes opposed the idea of lowering unemployment benefit payments
What were political impacts of the Wall Street Crash?
-Weimar didn’t know how to handle the situation which led to a decrease in popularity
-hard for the coalition government to agree on action particularly if it called for sacrifices->coalition of parties Weimar relied on collapsed in 1930->the crisis continued to worsen and people lost confidence in Weimar
-Bruning set up some public work schemes and his successor Von Papen began to allocate unused land to dispossessed peasants and workers in 1931->too late and despite an improvement in the economy by 1932 this was imperceptible to voters
-by 1930 there was no majority government in the Reichstag and an increase in NSDAP and KPD politicians->system of government was weakened
When did Bruning have to resign? Why?
-1932
-lost control of the Reichstag, economy and people on the streets->left a dangerous power vacuum for a new leader to fill
-couldn’t solve the economic depression and lacked support from Hindenburg
What was the impact of the Wall Street Crash on Germany?
-inflation
-people lost their savings
-unemployment (6.1 million 1932)
-failure of Weimar to handle the Great Depression->lost trust
-rise in support for extremist parties which were more feared like KPD and Nazis
What did the Nazis gain from the Great Depression?
-made Weimar more unpopular and the Nazis gained popularity and support as people wanted change and wanted dictatorship
How important was the reaction of the Weimar Republic to the crisis?
-it was incredibly important due to poor decision making and lack of stable government which would impact their popularity
