The Impact Of The Depression

The Great Depression

Following the Wall Street Crash in 1929, the world was thrust into a deep depression. This was called the 'Great Depression'.

The Wall Street Crash 1929

In October 1929, the Wall Street stock market crashed.
Thousands of American firms and banks went bankrupt.
In response, the USA withdrew loans and investments from around the world and in 1930 slapped protectionist tariffs on trade.

Impact on the world

In 1930, world trade fell by more than 60%.
The total wealth of nations, measured by GDP, fell by 15%.
This caused a catastrophic, global fall in demand.

Historical & economic assessment

The economist Peter Temin (1991) argues that the Stock Market Crash did not actually cause the Great Depression. Before 1929 there were 'autonomous declines in investment' in the US where investment fell by 15% in 1928. Businesses had stopped investing in new productive capacity and capital.
Paul Romer (1990) agrees with Temin. Romer says that US GDP was falling before the Stock Market Crash in 1929. The crash may have reflected economic weakness rather than caused it.

The Impact of the Depression

Due to Germany's reliance on the Dawes and Young plans, the Weimar Republic was badly affected by the Wall Street Crash.

Unemployment

Unemployment rose from 600,000 in 1928 to 1,600,000 in 1929.
By 1930 it had doubled to three million and by 1933 it doubled again to six million.
There were regional variations. Depressed industrial areas like Thuringia said especially badly.
The social ramification of this was that people lost their sources of income.
This meant that many were in poverty.
Crop prices fell by up to 60% as poverty reduced demand.

Bankruptcy

By 1932 18,000 farmers had gone bankrupt. In industry 50,000 businesses went bankrupt between 1930 and 1932.
In 1931 five major banks closed down.

Recalled Loans

The greatest withdrawal of investment from Germany was in late September 1930 at least partly because extremist parties did so well in the election.
Loans were an important source of finance for industry and agriculture, but German banks could not fill the gap and there was no credit to be had elsewhere.
This led to the Great Depression and hit the middle classes hard.
Germany still had to pay reparations.

Government efforts to combat the Depression

Legal restrictions made it impossible for the Reichsbank to print more money (to prevent inflation).
Governments cut back their spending as tax revenues had fallen. Coalitions found it difficult to agree where the cuts should be made.
From 1928-33 war victims pensions were cut by a third, angering thousands.
Brüning pursued protectionism, raising the cost of imports.

Political extremism

In the 1930s the Müller, SPD-led Coalition collapsed over failure to agree where cuts in welfare budget should be made. Such crises reduced belief in democracy.
People were dissatisfied with the Weimar Republic and sought more radical solutions to their problems.

1The Weimar Republic 1918-1933

1.1Establishment Of The Weimar Republic 1918-1924

1.1.1Post WW1

1.1.2Weimar Constitution

1.1.3Peace Settlement

1.1.4End of Topic Test - Germany Post WW1

1.1.5Economic Issues

1.1.6Economic Issues 2

1.1.7Social Issues

1.1.8End of Topic Test - Economic & Social Issues

1.1.9Extremist Threats

1.1.10Extremist Threats 2

1.1.11End of Topic Test - Extremist Threats

1.1.12Political Instability & The Invasion of the Ruhr

1.1.13Weimar Government by 1924

1.1.14End of Topic Test - Weimar Government by 1924

1.1.15A-A* (AO3/4) - Germany Post WW1

1.2The 'Golden Age' Of The Weimar Republic 1924-1928

1.2.1Economic Developments

1.2.2Industry & Agriculture

1.2.3End of Topic Test - Economic Developments

1.2.4Social Developments

1.2.5Social Developments 2

1.2.6End of Topic Test - Social Developments

1.2.7Political Parties

1.2.8Political Stability

1.2.9End of Topic Test - Weimar Politics

1.2.10Germany's International Position

1.2.11Germany's International Position 2

1.2.12End of Topic Test - International Position

1.2.13A-A* (AO3/4) - The Weimar 'Golden Age'

1.3The Collapse of Democracy 1928-1933

1.3.1The Impact Of The Depression

1.3.2Politics After The Depression

1.3.3The Appeal Of Extremism

1.3.4End of Topic Test - The Depression & Politics

1.3.5'Backstairs Intrigue'

1.3.6'Backstairs Intrigue' 2

1.3.7End of Topic Test - Backstairs Intrigue

1.3.8Political Developments

1.3.9The State by March 1933

1.3.10End of Topic Test - Political Developments

1.3.11A-A* (AO3/4) - The Collapse of Democracy

2Nazi Germany 1933-1945

2.1The Nazi Dictatorship 1933-1939

2.1.1Hitler's Consolidation Of Power

2.1.2The Terror State

2.1.3End of Topic Test - Consolidation of Power

2.1.4Opposition

2.1.5Propaganda

2.1.6A-A* (AO3/4) - Terror State & Propaganda

2.1.7End of Topic Test - Propaganda

2.1.8Economic Policies

2.1.9Economic Policies 2

2.1.10Impact Of Economic Policies

2.1.11Impact Of Economic Policies 2

2.1.12End of Topic Test - Economic Policies

2.1.13Social Policies

2.1.14Social Policies 2

2.1.15Volksgemeinschaft

2.1.16End of Topic Test - Social Policies

2.1.17A-A* (AO3/4) - Economic & Social Policies

2.2The Racial State 1933-1941

2.2.1The Radicalisation Of The State

2.2.2Anti-Semitism

2.2.3Development Of Anti-Semitic Policies

2.2.4Development Of Anti-Semitic Policies 2

2.2.5End of Topic Test - Anti-Semitism

2.2.6Treatment of the Jews in the Early Years of War

2.2.7Deportation & Anti-Semitism Evaluation

2.2.8End of Topic Test - Early Treatment of the Jews

2.2.9A-A* (AO3/4) - The Racial State

2.3The Impact Of War 1939-1945

2.3.1Home Front

2.3.2Impact On Society

2.3.3Impact On Society 2

2.3.4End of Topic Test - Impact of the War

2.3.5War Economy

2.3.6War Economy 2

2.3.7Policies Towards The Jews & Untermenschen

2.3.8A-A* (AO3/4) - Impact of the War

2.3.9End of Topic Test - War Economy

2.3.10Opposition

2.3.11Opposition 2

2.3.12Nazi State by 1945

2.3.13End of Topic Test - Opposition

2.3.14A-A* (AO3/4) - Opposition & The State in 1945

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