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 and 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 1930 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.

Brüning's Policies after the Depression

Brüning tried to reduce the impact of the Depression on German society. Ultimately, he lost support from the elite and was forced to resign because Hindenburg disagreed with his policies.

Attacking paramilitary groups

As unemployment grew so did political violence. Brüning banned both the SA and the RF (The Nazis and Communist paramilitary groups.)

Deflation

Brüning’s other policies led to further deflation: prices, wages, welfare payments and rents all decreased.
Business profits fell, losing him industrialists’ support.

Land to the unemployed

Brüning’s policy of giving land from bankrupt Junker estates to unemployed workers lost him even more – his chancellorship.
Hindenburg was a Junker and refused sign Brüning’s emergency decrees.
Brüning resigned in April 1932.
Ultimately Brüning’s government fell not because of a no-confidence vote in the Reichstag but because Hindenburg did not approve of his policy.

Historical assessment

Feuchtwanger (1995): ‘Brüning was the last chancellor to govern with any kind of constitutional legitimacy.’
Bracher: ‘[Brüning] was not … the last chancellor before the break-up of the Weimar Republic, but the first chancellor in the process of destroying German democracy.’
Hite and Hinton (2000) ‘Brüning lost office…because he had lost President Hindenburg’s support.’
Mommsen (1991) blames Brüning for deliberately worsening the economic crisis and thus creating the conditions that only Hitler understood to exploit.

Economic assessment

The economist Peter Temin (1991) argues that the German government did not handle the economy well after the Wall Street Crash.
- Chancellor Brüning's cabinet had 'deflationary impulses'. They tried to reduce government spending by raising taxes and cutting benefits.
- Reichsbank (German central bank) reserves fell below requirements and they couldn't borrow from any banks or central banks in the world. So, they raised interest rates. This worsened the economic situation as anyone with debt had to pay a higher rate of interest.

1Political & Governmental Change, 1918-1989

1.1Creation & Collapse of Weimar, 1918-1932

1.1.1Creation of a Republic

1.1.2Strengths & Weaknesses of Weimar Constitution

1.1.3Overcoming Challenges to the Constitution

1.1.4The Great Depression

1.1.5The Collapse of Democracy

1.1.6The Collapse of Democracy 2

1.1.7Hitler Becomes Chancellor

1.2Nazi Dictatorship, 1933-1945

1.2.1Establishing a Dictatorship

1.2.2Consolidating Power

1.2.3Nature of Government

1.2.4Government in Wartime

1.2.5Top Grade AO2/3 - Political & Governmental Change

1.3Return to Democratic Government, 1945-1989

1.3.1Creation of the FRG, 1945-1949

1.3.2Consolidation Under Adenauer

1.3.3Consolidation Under Erhard

1.3.4Maintaining Stability Under Brandt

1.3.5Maintaining Stability Under Schmidt

1.3.6Maintaining Stability Under Kohl

1.3.7Top Grade AO2/3 - Return to Democratic Government

2Opposition, Control & Consent 1918-1989

2.1Opposition to Government, 1918-1989

2.1.1Impact of Versailles

2.1.2Political Extremism & Crises, 1918-1932

2.1.3Opposition & Dissent in Nazi Germany, 1933-1945

2.1.4Political Dissent from the Left, 1949-1989

2.1.5Political Dissent from the Right, 1949-1989

2.1.6Top Grade AO2/3 - Opposition to Government 1918-89

2.2Controlling the People, 1918-1989

2.2.1Attempts to Control Extremism

2.2.2Repression, 1933-1945

2.2.3Censorship & Propaganda, 1933-1945

2.2.4De-Nazification Policies of Western Allies, 1945

2.2.5Constitutional & Legal Response to Extremism, 1949

2.3Popular Support, 1918-1989

2.3.1The Nature of Support for the Weimar Government

2.3.2Support for the Nazi Regime

2.3.3The Nature of Support for Democracy, 1945-1989

2.3.4Top Grade AO2/3 - Controlling the People

3Economic Developments & Policies, 1918-1989

3.1Reacting to Economic Challenges, 1918-1932

3.1.1Economic Crises & Government Response, 1918-1923

3.1.2Economic Loans, 1924-1928

3.1.3Policies for Recovery, 1924-1929

3.1.4The Great Depression

3.1.5Change in Living Standards

3.1.6Top Grade AO2/3 - Reacting to Economic Challenges

3.2Controlling the Economy, 1933-1945

3.2.1Attempting Economic Recovery

3.2.2Creating a Command Economy

3.2.3Change in Living Standards

3.2.4Impact of War

3.2.5Impact of War 2

3.2.6Top Grade AO2/3 - Controlling the Economy

3.3Creating the Social Market Economy, 1945-1989

3.3.1Economic Recovery, 1945-1955

3.3.2The Economic Miracle, 1955-1966

3.3.3Surviving the Recession, 1960-1969

3.3.4The Oil Crisis

3.3.5Integration into the European Economy

3.3.6Change in Living Standards

3.3.7Top Grade AO2/3 - Creating Social Market Economy

4Aspects of Life, 1918-1989

4.1Attitudes Towards Women, 1918-1989

4.1.1Role & Status of Women in the Weimar Republic

4.1.2Impact of Kinder, Küche, Kirche

4.1.3Impact of WW2 on Women

4.1.4Role & Status of Women in the FRG

4.1.5Top Grade AO2/3 - Attitudes Towards Women

4.2Education & Cultural Developments, 1918-1989

4.2.1Education in Weimar

4.2.2Cultural Experimentation in Weimar

4.2.3Education Under the Nazis

4.2.4Nazi Culture

4.2.5Education in the FRG

4.2.6Generational Conflict

4.2.7Top Grade AO2/3 - Education & Cultural Development

4.3Position of Ethnic Minorities, 19189-1989

4.3.1Ethnic Minorities in the Weimar Republic

4.3.2Nazi Racial Policies, 1933-1939

4.3.3Nazi Racial Policies During the War

4.3.4Ethnic Minorities in the FRG

4.3.5Top Grade AO2/3 - Position of Ethnic Minorities

5Historical Interpretations

5.1Influence of German History

5.1.1Influence of German History

5.2Hitler & Foreign Policy

5.2.1Hitler & Foreign Policy

5.3Contribution of Other Nations to WW2

5.3.1Weak Nations

5.3.2Appeasement

5.3.3The Rise of Fascism

5.4Reasons for Invading Poland

5.4.1Reasons for Invading Poland

5.4.2Top Grade AO2/3 - Historical Interpretation

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