Germany - 2.1.1 Wall Street Crash and the Great Depression Flashcards
Why did the ‘Golden Age’ come to an end?
- On 3 October 1929 Stresemann had a heart attack and died. Shortly before his death, in September, he warned:
“The economic position is only flourishing on the surface. Germany is in fact dancing on a volcano. If the short-term loans are called in by America, a large section of our economy would collapse - Later, the Wall Street Crash in the USA triggered a world economic crisis knows as the Great Depression. In Germany is caused economic collapse, massive unemployment and political crisis
What was the Wall Street Crash? (4)
- In October 1929 share prices had begun to fall on the wall street stock exchange.
- People were scared about losing money so they rushed to sell their shares before they fell further
- In this panic, something called Black Thursday on the 24th of October occurred when panic selling sent prices even lower. Shares worth $20,000 in the morning were only worth $1000 by the end of the days trading.
- In a week, investors had lost a whopping 4 thousand million dollars
What was the immediate impact of the Wall Street Crash? (4)
- German banks were major investors in shares on the US stock exchange and suffered huge losses
- There was a run on the banks - people rushed to withdraw their money, causing the banks to run out of cash
- German banks urgently needed cash to pay their account holders so they demanded the return of business loans
- Deprived of loans, German industries had to cut back production or close completely. The economy collapsed
What was the ‘vicious downward cycle’ of the Wall Street Crash? (4)
- Due to loss of finance and the subsequent need to cut back production, German industries and farms laid off workers
- Since the economic crisis was worldwide, German companies were selling fewer goods abroad. More workers were made unemployed
- The unemployed couldn’t afford to spend as much, sales fell further and even more workers were made unemployed
- Mass unemployment and economic depression
What impact did the Wall Street Crash on people? (4)
- By January 1933, 1/3 Germans were unemployed, with the figure hitting 6.1 million. The government struggled to pay unemployment benefit so these cut and taxes were raised, causing even bigger problems for the unemployed. This included 40% of factory workers, 50% of all Germans between the age of 16 and 30, and 60% of university graduates
- People who had their savings invested in shares found the value of their savings crashed. This meant if they became unemployed they would have no savings to fall back on. (6 years after hyperinflation had wiped out peoples savings)
- Workers’ taxes went up but wages went down
- Homeless people could no longer afford rent and became homeless. Shanty towns sprang up and violence and theft increased. Shanty towns - makeshift houses. Fights would break out in the streets between police and roaming vans of young men
After the Wall Street Crash, there was an increase of ___% in arrests for theft in Berlin
24
Describe the political failure in Germany after the Wall Street Crash (4)
- In March 1930 the Chancellor, Hermann Muller (social democrat), resigned and was replaced by Heinrich Bruning (leader of the centre party)
- He proposed having higher taxes to pay for unemployment benefits and a fixed timed limit on unemployment benefits in order to make payments for affordable. This alienated everyone. The right wing and wealthier people were opposed to paying more taxes while the left wing and the working class were unhappy about reduced benefits
- In July 1930 Bruning cut government expenditure, wages and unemployment pay. This added to the spiral of decline and unemployment continued to rise, as well as making those who had lost their jobs even poorer
- Since Bruning could not get the Reichstag to agree to his actions, President Hindenburg used Article 48 of the Weimar constitution, to govern. This undermined democracy and weakened the power of he Reichstag - arguable opening the way for Hitler’s later dictatorship
Why did the Depression increase support for extremist parties? (4)
- Democracy seemed to be failing as the moderate parties in the Reichstag failed to work together to solve the problems. The Weimar Government was so weak, the Chancellor had to ask the president to pass emergency laws
- Many working-class people turned to the extreme left-wing party, the Communists (KPD), who seemed to offer solutions to unemployment and failing wages
- Many middle and upper class people turned to the extreme right-wing party, the Nazis, because they were afraid of the Communists gaining power and taking over their businesses
- Germans from all sectors of society turned to the Nazis because they wanted a strong government who promised to restore law and order and workable economic policies
Whereas 10% of voters supported the Communists in the elections of 1928, this went up to 15% of voters by 1932, how many extra voters was this?
1 million
By _____, the german communist party was the largest communist party in the world outside of the soviet union.
1932
However, support for the _____ grew faster than the communists because the middle and upper classes were scared of communism. As communist support grew, they became even more likely to vote for the Nazis
Nazis
By _____, 4 years after the Wall St Crash, world trade had fallen by over ___%. This got rid of any chance of German success through exporting
1933, 60
German exports had risen ___% between 1925 and 1929
40
After Hitler’s reorganisation, the Nazis were a far more attractive party for the German people. The Nazis could stage a good, well-funded campaign because they were funded by millionaires, such as _____ and ____________. All of Hugenberg’s ___ newspapers spread the Nazi message
Krupp, Hugenberg, 53
