History - Germany, Collapse of democracy 1929-33

What was the Wall street crash, what impacts did it have on the US?

• the worst ever fall in share prices occured at the New york stock exchange on the 24th of October 1929, this is known as ‘black thursday’

• Another collapse occured on the 29th of October 1929, $10 billion was lost from the largest US companies

• many millionaires and smaller investors lost all their wealth

impacts

• companies would close and unemployment grew

• banks stopped lending and called in existing loans

Overall, this created a prolonged economic depression in the USA

What was the impact on Germany from the Wall Street crash?

Germany’s economy had only just recovered in some elements, however sectors like agriculture and industry struggled in 1928, this made the impacts of the wall street crash worse, also the economy relied on US investment, these loans were ‘called in’, also the US was a major market for German goods

• German exports had dropped 61%

• Industrial production had dropped 58% from 1928, to compare, Britain’s only fell by 11%

• The economy had entered a deep depression

Why was the Germany economy affected so badly?

Foreign trade collapsed and prices fell,

• companies went bankrupt and unemployment grew

• The surviving companies had their hours cut and workers made redundant

• customers withdrew money from banks and loans were left unpaid

This created a banking crisis

• Austrian bank collapsed in may 1931, (credit anstalt)

• German banking system followed into crisis

• in july 1931, the government closed banks for 2 days as well as suspending the stock exchange

• 1/3 of workers became unemployed by 1932

What were the issues with unemployment?

official figures were limited based upon only those registered, many woman for example aren’t registered

• some estimates suggested that by january 1933, 8 million were unemployed

• Worst areas for unemployment were the Ruhr, Silesia and Hamburg

• Severe cuts in civil service and wage reductions

What impact did the wall street crash have on Rural areas?

Farming in Germany had been previously affected in 1928, with the wall street crash agricultural products fell further in value

• exports went into further decline, food sales in Germany fell

• many farmers had given up their lands they were unable to pay back loans

• farm labourers lost their jobs

How did poverty increase during the Great Depression? What were the social impacts?

• Mass unemployment overwhelmed the welfare system, time limits were put into place on state benefits, local authorities were less generous and means tested

• Woman and young people received less

• Single industry towns and wee hit the hardest, one town which had a large glassware industry suffered and 50% of people were unemployed

• Diseases were caused by malnutrition like rickets and TB

• Suicide rates increased

• Evictions increased

What were the Impacts on youth from the Great Depression?

Unemployment and juvenile crime

Unemployment

• high unemployment, Hamburg in 1933 had males 14-25 at 39% unemployment, woman were at 25.2%

• This meant many large Gangs of young men formed, they often met in public places which felt threatening to the middle classes.

• Many of these men would form attraction to extremist political organisations

Juvenile crime

• the number of 14-25 year olds accused of crime increased, especially with theft or threatening behaviour

• Offences against the state were often reported, this included violent disorder during demonstrations

What were the Impacts on youth from the Great Depression?

• political extremism

• Government schemes helping the youth

Political extremism

• KPD we’re somewhat successful at getting working class men to support the party, they would attract ‘wild cliques’ to engage in street battles with their opponents

• The nationalist right had groups like the Hitler Youth and the SA which offered young men food, shelter and uniforms - a sense of unity

• However, membership to parties weren’t stable, many had no contact to parties especially woman

Government scheme to help the youth

• the government aimed to lower the effects of unemployment through labour exchanges

• They set up day centres which allowed working classes to engage in work related activities and socialise

• The schemes were unpopular and many still striked for higher pay in October 1930 and June 1932

• Priority was to get young “off the streets”

What were the Impacts on woman from the Great Depression?

• right wing parties stood by their ideology that woman who work as well as their husbands are “double earners”. This campaign achieved some success and in May 1932 a law was passed to stop married woman from working in parts of the civil service if seemed necessary, they could only do this if they had proof that the woman was economically stable, the reich postal service dismissed 1000 married woman

How did the ‘grand coalition’ collapse?

• collapsed in 1930 mainly due to the increased support for far right and left parties, the depression meant mullers government was in deadlock on how to tackle the economy

• The SPD argued to protect benefits and raise taxes - Keynesian economics, borrow big, create jobs and get the economy going

• The DVP argued to reduce benefits - austerity

• This led to muller resigning in march 1930