3.1) Germany: Impact of the Depression 1929

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Economic impact:

  • 24th October 1929, NY Stock exchange fell in it's share prices.
  • A week later another collapse occured where value or large companies fell by $10b.
  • Many millionaires = bankcrupt, small investors lost savings.
  • Businesses = bankcrupt, workers lost jobs, bank recalled loans and stopped lending.
  • This disaster effected Germany's economy, society and politics.
  • German recovery from 1924-28 were due to American loans.
  • In 1928, their economy froze due to low investment.
  • After the Wall Street Crash, they stopped. American banks wanted immediate repayment from Germany.
  • Germany needed to invest to help it's economy, money was taken away from them.
  • USA was largest oversea market for Germany's goods too, but their export trade declined due to reduced demand for imported goods.
  • 1929-32, export trade declined and industry fell by 60%.
  • The depression effected Germany the most in Europe, e.g. UK industry only fell by 10%.
  • Foreign trade collapsed and many companies bankcrupt.
  • Companies that survied, lowered wages, workers and hours.
  • Banks had customers withdraw money and big loans weren't paid.
  • German banks were in crises., Germans were desperate.
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Economic impact:

  • Unemployment increased. 1/3 registered were unemployed in 1932.
  • But this wasn't accurate, many redundant workers like women didn't register and weren't counted.
  • January 1933, real no. was 8million.
  • Depression effected industrial areas like the Ruhr.
  • Main port cities like Hamburg was hit.
  • White-collar workers suffered, Civil service had cuts in their size and salaries.
  • Farmers struggled in the golden age but were now in major hardship.
  • Prices fell, exports of agriculture and sales for food fell and Germans had no money.
  • Farmers left farms as banks wanted loans back, effected countryside.
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Social impact:

  • Unemployment effected German society.
  • Unemployment now impacted the Welfare budget and in 1930 there were attemts to cut the amount paid.
  • Had to rely on state benefits for certain amount of time.
  • They then went to local authorites for relief, and local benefits were strict/less generous.
  • Women benefited less than men, but young people less than both.
  • Different towns were hit differently.
  • E.g. Brand-Ebrisdorff in Dresden and glass making.
  • Poverty was rising due to the depression.
  • Diseases linked to poor nutrition like rickets increased.
  • Doctors reported a lot of malnutrition in Germany at the time 
  • Suicide rates increased as everything = hopeless.
  • Unemployed tenants couldn't pay rents were kicked out, tents and shanty towns appeared in cities like Berlin.
  • It is said that their diet to too little to live on but too much to die from.
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Social impact: Young People:

  • Depression led to high rates of unemployment in young people.
  • June 1933 in Hamburg, unemployment for 14-25 males was 40% and females 25%.
  • High rates would have consequences, no jobs, no future, the roamed the streets.
  • Many reffered to gang crime and political extremism. 

JUVENILE CRIME:

  • Rate if juvenile convictions didn't incread during the depression.
  • No. of 14-25 yea olds were accused of crime.
  • young men charged with theft grew.
  • They committed offences against the state via assault and threatening behaviour, violence during political demonstrations 

POLITICAL EXTREMISM:

  • Involvement for young men in extreme groups rose.
  • The KPD = successfully got W.Class youths to join their political demonstrations/street fight opponents
  • Paramiliary groups for nationalist right recruited unemployed youth.
  • Hitler Youth and SA offered food, shelter and actvities to stop boredom of unemployment.
  • But majority of youth had no contact with extreme groups.
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Social impact: Young People and Women.

SCHEME TO HELP THE YOUNG UNEMPLOYED:

  • Reflected Bruning's governemtn policies.
  • Placed faith in market forces to help the economy in the future.
  • Wanted to control expenses on benefits and reduce the damaging effects on the young. 
  • Day centres were set up to help young in work related activites and socialize.
  • Emergecny labour schemes made youth take unskilled manual labour, they recieved below minimum wage. 
  • But these schemes were unpopular with the young resulting in 2 strikes for higher wages in October 1930 and June 1932.
  • Voluntary labour schemere to also put in where theyd be sent from cities to resedential work camps for 6 months.
  • Priority was getting the youth of the streets.

IMPACT ON WOMEN:

  • Coped with the effects better than males. Female workforce increased during the depression.
  • Dismissal of workers reignited debate whether women should work if males weren't
  • Right wing parties were against these 'Dual-earners' and a law in 1932 dismissed women from Civil-service.
  • Equal rights activists were hit hard by traditionalists and 1000 married women were dismissed. The depression set them back.
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Political impact:

  • Consequences caused were the fall of Grand Coalition by Hermann Muller in March 1930.
  • Extreme left and right parties had more chances and undermine democracy.
  • More political violence.

FALL OF THE GRAND COALITION:

  • A broad coalition with 5 parties from the SPD to the DVP.
  • October 1929, Wall street crash = unemployemtn rose and benefit strained state finances.
  • Tax fell and state budget was in a deficit by 1929. 
  • Coalition was split as DVP right wanted to reduce benefits and SPD wanted keep benefits and raise taxes.
  • Government was deadlocked and Muller resigned in March 1930.
  • Heinrich Bruning, Centre party leader was appointed by Hindenburg.
  • Hindenbrug was influenced by defence minister Groener and Von Schleicher his political adviser. This showed how army began to play a role in politics.
  • Both opposed Parliamentary democracy.
  • In March 1930 this = their chance for an authoritarian Government.
  • Hindenburg was anti democracy and Bruning had authoritarian links.
  • Laws passed via Reichstag had Declined whilst Laws passed by decree increased.
  • ^ Democracy to Dictatorship?
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Political impact:

  • Brunings coalition excluded the SPD the largest party.
  • This meaant they didn't have majority to pass laws. 
  • After mArch 1930 no Government had a majority and had ti rely on ruling be presidential decree.
  • Weimar democracy was dead before Hitler was Chancellor in January 1933.

SEPTEMBER 1930 REICHSTAG ELECTION AND SUPPORT FOR THE EXTREME:

  • Bruning wanted to cut expendature and raise taxes. 
  • He didn't have majority support in the reichstag so he pursuaded Hindenburg to pass this by presidential decree.
  • This made a political crises as article 48 was only meant to be used in emergencies.
  • SPD won reichstag support for the decree to be withdrawn. 
  • Bruning dissolved the reichstag and called an election in September 1930 which changed politics in Germany.
  • Extreme parties from left and right gained alot. 
  • KPD = 1m votes and 77 seats.
  • Nazi party support was more significant with 12 seats in 1928 to 107 seats in 1930.
  • 2/5 voters were anti-democratic, 107 deputies disrupted the Reichstag.
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Political impact:

  • The reichstag became unmanagebale. Procedings became irrelevant. 
  • They met less and didn't meet from February - October 1931.
  • Germany was shifted from Reichstag to President.

INTENSIFICATION OF POLITICAL VIOLENCE:

  • From 1919-23 there were riots, assassinations and uprisings.
  • In 1924-29 it had calmed down but 29 Nazis were killed by Communists where as 92 Communists were killed by Nazis.
  • 1930-33, Political violence increased a lot.
  • KPD's Red Front Fighter's league vs Nazi's SA.
  • Each side broke into meetings, rioted and interogated opponants.
  • 1931, violence was too much, Bruning decided to ban political uniforms in December 1931.
  • In April 1932 Hindenburg signed a decree to outlaw the SA which still failed to stop the SA.
  • Their violence continued and membership grew to 400,000.
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