The Great The Great DepressionDepression

What happened?What happened?What caused the Great What caused the Great Depression?Depression?Impact on GermanyImpact on Germany

Great Depression was the Great Depression was the economic event of the 20economic event of the 20thth

Century….Century…. 2424thth October “Black Thursday”, October “Black Thursday”,

panic selling on the Stock panic selling on the Stock ExchangeExchange

““Black Tuesday” 29Black Tuesday” 29thth October October panic selling continued and 16.4 panic selling continued and 16.4 million shares sold. Prices came million shares sold. Prices came crashing down.crashing down.

What happened?What happened?

The stock market was an important The stock market was an important source of funding for industrysource of funding for industry

Stock prices are based on estimates of Stock prices are based on estimates of future earnings potential – the 1920’s future earnings potential – the 1920’s tells a story of optimism for the future.tells a story of optimism for the future.

Rising stock dividends – huge interest Rising stock dividends – huge interest from a variety of investors increased from a variety of investors increased stock pricesstock prices

Increase in wages, Americans has surplus Increase in wages, Americans has surplus money to save or investmoney to save or invest

Banks had money that was easily more Banks had money that was easily more available – took out loans to buy stock.available – took out loans to buy stock.

Lack of stock market regulations: Lack of stock market regulations: practiced “buying on margin” buying stock practiced “buying on margin” buying stock on credit put a down payment on stock on credit put a down payment on stock and then wait to receive the profit to pay and then wait to receive the profit to pay the rest of the stock. – speculative the rest of the stock. – speculative investing.investing.

The Depression affected The Depression affected different industrialised different industrialised

countries in different ways …countries in different ways … Historians often use the First World Historians often use the First World

War as a starting point. Why?War as a starting point. Why?

The war made it impossible for Europe The war made it impossible for Europe to maintain its previous levels of to maintain its previous levels of production. For example, France, Brit production. For example, France, Brit and Germany did 60% of the exports and Germany did 60% of the exports of manufactured goodsof manufactured goods

Most of their markets were in America Most of their markets were in America and Japanand Japan

At the end of the war, Europe was At the end of the war, Europe was forced to import food from America.forced to import food from America.

America was going from a traditional America was going from a traditional debtor to a creditor – had financed the debtor to a creditor – had financed the war and had loaned money towards its war and had loaned money towards its reconstructionreconstruction

This had increased the number of This had increased the number of financiers – eager to give loans out financiers – eager to give loans out and using unsound lending practices.and using unsound lending practices.

The main objective was to “do the The main objective was to “do the most business”most business”

The Cataclysmic collapse of The Cataclysmic collapse of world tradeworld trade

Many leading industrialised nations responded Many leading industrialised nations responded to the crisis by imposing trade barriers on to the crisis by imposing trade barriers on importsimports

It was hoped that this would increase demand It was hoped that this would increase demand for domestic goods and raise revenue from for domestic goods and raise revenue from tariffs (taxes imposed on imports)tariffs (taxes imposed on imports)

These increased taxes had the effect of These increased taxes had the effect of reducing spending and in turn reducing reducing spending and in turn reducing employmentemployment

How did the Depression affect How did the Depression affect Germany?Germany?

The Weimar Republic was devastated by The Weimar Republic was devastated by the Wall Street Crashthe Wall Street Crash

America had propped up the Weimar America had propped up the Weimar Republic with huge loans in 1924 : Dawes Republic with huge loans in 1924 : Dawes Plan and the Young Plan.Plan and the Young Plan.

America needed those loans back to assist America needed those loans back to assist her own faltering economy. America her own faltering economy. America requested the loan to be repaid in 90 requested the loan to be repaid in 90 days!days!

Stresemann had Stresemann had admitted that the admitted that the German economy was German economy was fragile:fragile:

““The economic position is The economic position is only flourishing on the only flourishing on the surface. Germany is in surface. Germany is in fact dancing on a fact dancing on a volcano. If the short volcano. If the short term credits are called term credits are called in, a large section of in, a large section of our economy would our economy would collapse”collapse”

Europe still in chaos Europe still in chaos – no other European – no other European country could country could provide money like provide money like the US did.the US did.

Companies through-Companies through-out Germany went out Germany went bankrupt and bankrupt and workers lost their workers lost their jobs.jobs.

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Millions

28 29 30 31 32 33

Year 1928 - 1933

German Unemployment

Effects on GermanyEffects on Germany

By 1932 approx one worker in three By 1932 approx one worker in three was registered as unemployed.was registered as unemployed.

Drastic falls in income caused a Drastic falls in income caused a collapse in tax revenue and many collapse in tax revenue and many were unable to claim unemployment were unable to claim unemployment benefits – as the government could benefits – as the government could not afford to pay it.not afford to pay it.

It was in this economic chaos It was in this economic chaos that the Nazis and Communists that the Nazis and Communists

thrived…thrived… 1932 1932

1932 Nazi election poster1932 Communist poster“End the System”

Crime and suicide rates rose sharplyCrime and suicide rates rose sharply

1930s election: Nazis made a breakthrough 1930s election: Nazis made a breakthrough winning 107 deputieswinning 107 deputies

The Communists won 77 deputiesThe Communists won 77 deputies

Both parties opposed democracy and used Both parties opposed democracy and used violence against their political opponents.violence against their political opponents.

Hitler’s brown shirts clashed with their Hitler’s brown shirts clashed with their Communist enemiesCommunist enemies

His nickname was the “hunger His nickname was the “hunger Chancellor”…..Chancellor”…..

Heinrich Bruning Heinrich Bruning (between 1930 – 1932)(between 1930 – 1932)

Government spending Government spending was cut to keep inflation was cut to keep inflation down and exports down and exports competitivecompetitive

Increased taxes, reduced Increased taxes, reduced salaries and reduced salaries and reduced unemployment unemployment assistance.assistance.

Given his unpopularity, Given his unpopularity, Bruning found it difficult Bruning found it difficult to form a majority in the to form a majority in the Reichstag.Reichstag.

Relied heavily on Article Relied heavily on Article 48. Govt being ignored48. Govt being ignored

“he was so unpopular, that when he travelled by train he had to keep the blinds downAs people caught sight of him, they threw rocks!!!”

The end of Parliamentary The end of Parliamentary democracydemocracy

President Hindenburg President Hindenburg lost confidence in lost confidence in Bruning and quarrelled Bruning and quarrelled a variety of reformsa variety of reforms

Some of the Some of the President’s advisors: President’s advisors: General Kurt von General Kurt von Schleicher wanted to Schleicher wanted to include the Nazis in the include the Nazis in the government.government.

Bruning opposed this Bruning opposed this and was succeeded by and was succeeded by Franz Von Papen (who Franz Von Papen (who was equally unpopular)was equally unpopular)

General Kurt von Schleicher Became chancellor in Dec 1932 – 1933

1932 Elections1932 Elections The results for Weimar The results for Weimar

Germany was a Germany was a disaster. A majority of disaster. A majority of Germans voted for non-Germans voted for non-democratic parties.democratic parties.

A senior NAZI official, A senior NAZI official, Gregor Strasser, Gregor Strasser, claimed that what was claimed that what was a disaster for Weimar a disaster for Weimar was “good, very good was “good, very good for us”for us”

Hitler proved adept at using moderntechnology. He also recognised the powerOf the radio ahead of many other politicans

The results speak …..The results speak …..May 1924

KPDSDPCathDNVPNaziOther

July 1932KPDSDPCathDNVPNaziOther

Nov 1932KPDSDPCathDNVPNaziOther

Mar 1933KPDSDPCathDNVPNaziOther

Communist party (KPD), Social Democrat party (SDP), Catholic centre PartyNationalist Party (DNVP), Nazi party (NSDAP),

Despite Hitler being the Despite Hitler being the leader of the largest party, leader of the largest party, Hindenburg had contempt Hindenburg had contempt for the “little corporal”for the “little corporal”

Hindenburg chose his own Hindenburg chose his own Chancellor: Franz von PapenChancellor: Franz von Papen

1932 , the Reichstag 1932 , the Reichstag overwhelmingly expressed overwhelmingly expressed its no confidence in his its no confidence in his leadership. He called leadership. He called another election to get another election to get more supportmore support His support His support only decreased further.only decreased further. Franz von Papen – equally

Unpopular-has no supportFrom his fellow cabinet members

Hitler demanded to be made Chancellor.Hitler demanded to be made Chancellor.

Hindenburg, instead installed his own Chancellor General Kurt von Schleicher. Hindenburg, instead installed his own Chancellor General Kurt von Schleicher. (his only claim, was that he was a military man. He lasted only 57 days as (his only claim, was that he was a military man. He lasted only 57 days as Chancellor)Chancellor)

Von Papen began to plot against the new Chancellor and met with Hitler.Von Papen began to plot against the new Chancellor and met with Hitler.

Hindenburg was finally convinced that Hitler was the only way . He had the Hindenburg was finally convinced that Hitler was the only way . He had the support of the Reichstag and was incredibly popular with the Germany support of the Reichstag and was incredibly popular with the Germany populationpopulation

On January 30On January 30thth 1933 Hitler was summons to Hindenburg’s chambers and was 1933 Hitler was summons to Hindenburg’s chambers and was sworn in as Chancellorsworn in as Chancellor

Hindenburg expected Von Papen to “ control” Hitler – giving necessary Hindenburg expected Von Papen to “ control” Hitler – giving necessary guidance to one not experienced. Of course, this was not the case.guidance to one not experienced. Of course, this was not the case.

The democratic experience in Germany had come to an end with the The democratic experience in Germany had come to an end with the declaration of the Enabling Act.declaration of the Enabling Act.