Responses to the Great Depression, 1929-1939

Democracy under Siege, 1929-1945Kagan, Ch. 27 – pp. 775-781

What were the causes of the Great Depression?

1. US Stock market crash2. US call in short-term loans – hits German and

Austrian banks hard3. US banks begin to fail – European banks

begin to fail4. Businesses unable to pay workers – massive

lay-offs ensue (see Table 27.1)

An answer to Depression

• John Maynard Keynes– British economist– Encourages lending and government spending in

order to stimulate economic growth• Roosevelt’s New Deal

European Democracies’ Responses

• Two Big Mistakes– Tried to balance budgets and limit spending• Higher taxes on imported goods = decline in

international trade

– Governments became more conservative• GB’s Ramsay MacDonald – Labour Prime Minister, BUT

supported conservative fiscal policies = coalition government National Unity Government • Rise of Authoritarianism – Austria, Spain, Portugal

Adolph Hitler

• Lower-class Austrian with dreams of being an artist

• 1914 volunteers for Germany army in WWI – wounded and decorated

• Upset by Treaty of Versailles, still wants to serve for the good of Germany – joins National Socialist German Workers’ Party (Nazi)– By 1923 he is recognized as a

valuable party member

Beer Hall Putsch, 1923

• Failed attempt by Nazi Party to overthrow the Bavarian state government

• Hitler arrested– Writes Mein Kampf

• Aryan race and Lebensraum theories are outlined

Rise of Nazism

• “Failures” of Weimar Republic– Political and economic instability

• Growth of Nazi Party popularity– Charismatic leadership – Adolf Hitler– Simple Promises – restore Germany to its former glory;

provide jobs and stable economy; crack down on “enemies” (communists, Jews, profit driven capitalists) of the state

– Schutzstaffel (SS) unified group of body guards / followers– Pageantry, excitement, community

• Nuremberg Rally – Triumph of the Will

Hitler comes to Power

• 1932 – Nazi Party – strongest party in Reichstag

• 1933 Jan. - elected Chancellor• Feb. Reichstag fire = call for

emergency powers of decree; outlaws the Communist Party

• Enabling Act – Hitler given sole power (above the law) to make decisions of “national security”