The impact of the Depression of 1929

• Germany's economic recovery was financed by US loans but after the Wall Street Crash, these loans dried up. Also, the American banks wanted repayment of their loans. So, as the Germany needed more money to stimulate its economy, this was being withdrawn.
• The USA had been the largest overseas market for German manufactured goods - reduced demand for goods and Germany's export trade declined rapidly. Between 1929 and 1932, Germany's export trade declined by 61%.
• Caused the German economy to enter a deep depression.
• As Germany's foreign trade collapsed and prices fell, many companies had no choice but to declare themselves bankrupt and make employees redundant. The companies that survived had to cut their workforces.
• Banks had problems: people withdrew their money and didn't pay loans, causing the banking system to be plunged into crisis. In July 1931, government closed the banks and stock exchange to give the financial system some breathing space. This didn't do a lot.
• Unemployment increased - by 1932, about one third of workers were registered as unemployed; but these figures only show those registered as unemployed. It is estimated that in January 1933, the actual no. of unemployed was about 8 million. The main industrial areas were badly hit. Also, in the civil service, there were severe redundancies and reductions in salaries for those who remained.
• Farming was badly hit as prices collapsed, agricultural exports declined and food sales fell. Many farmers had to give up their jobs. Unemployment spread to rural areas as farm labourers lost their jobs.

• Mass unemployment had a terrible effect on German society.
• The costs of unemployment overwhelmed the welfare budget. From 1930, there were efforts to limit the amount of benefits being paid: the unemployed could only have state benefits for a fixed period; they had to apply to local authorities after this which were less generous and stricter; women received less relief than men and yound people received less than adults. 
• Poverty rose due to the Depression: diseases linked to poor nutrition and living conditions became more prevalent; doctors reported many cases of children with malnutrition; as unemployed tenants couldn't pay their rents and were evicted, shanty towns began to appear on the edges of large cities. 

The Depression led to high unemployment among young people, causing gangs of young men to congregate in public spaces in German towns and cities which alarmed older people. 

Juvenile crime
The overall rate of juvenile convictions didn't increase, but the no. of young people accused of crime increased. There was an increase in youths charged with offences against the state, including violence in political demonstrations, reflecting the deteriorating political situation.

Political extremism
Young men became more involved in extremist political groups e.g. the KPD had some success recruiting working-class youths to join demonstrations and organisations, like the Hitler Youth and the SA, offered unemployed men food, uniforms, shelter and the excitement of fighting in street battles. But, youth membership of these organisations was unstable and most young unemployed men had little contact with these groups. 

Schemes to help the young unemployed
The government's priorities were to keep control of expenditure on unemployment benefit and to lessen the effects of unemployment on the young. They had day centres where young people could do work-related activities and socialise. There were emergency labour schemes in which they did unskilled manual labour that were paid below the legal minimum. These schemes were unpopular, prompting two strikes for higher wages. There were voluntary labour schemes involving them being spent away to residential work camps. But, most offered no prospect of finding permanent employment. 

• In some ways, women workers didn't suffer from the effects of the Depression as much as men: the female proportion of the total workforce increased.
• But, the Depression and the dismissal of many millions of workers reignited the debate over whether married women should work when men were out of work. Right-wing parties waged a campaign against 'double-earners' - achieved some success as a law was passed allowing married women civil servants to be dismissed. This law was limited to central government and women could only be dismissed if it could be proved their economic situation was secure, but it was a significant symbolic victory for those who campaigned for it. After the law was passed, the Reich Postal Service dismissed about 1000 married women. So, the cause for equal rights suffered a serious setback.

The Depression caused strains on the political system which have far-reaching consequences:

• Caused the collapse of the Grand Coalition, led by Hermann Muller.
• Caused the parties of the extreme left and extreme right to gain support and in doing so, undermined the democratic system.
• Intensified political violence.

The collapse of the Grand Coalition

• The Grand Coalition: one of the most broadly based coalition governments in the Weimar era, representing five political parties from the left to the moderate right wing. After unemployment rose, placing a severe strain on state finances and creating a divsion in the coaltion. On the right, the DVP wanted to reduce unemployment benefit, whereas on the left, the SPD wanted to protect the level of benefits and raise taxes. In March 1930, Muller resigned. 
• His successor was Heinrich Bruning, appointed by Hindenburg and who had authoritarian leanings. Bruning's government excluded the SPD, the largest party, meaning that the government didn't have enough support to pass laws. After March 1930, no governments had majority support and had to rely on ruling by presidential decree.

The September 1930 Reichstag election and growth in support for extremist parties

• Bruning responded to the Depression by cutting expenditure and raising taxes to balance the budget. He didn't have majority support so persuaded HIndenburg to issue a presidential decree, causing another political crisis. 
• Bruning's coalition excluded the SPD, the largest party, meaning that his government didn't have enough support to pass laws. After March 1930, no government had no majority support and governments relied on ruling by decree. So, Weimar democracy was effectively dead in the water by the time HItler became Chancellor.

The intensification of political violence

• From 1930 to 1933, the level of political violence increased dramatically. The Nazis and communists with their Red-Front Fighters' League engaged in street battles, tried to break up political meetings of their opponents and rival marches. 
• By the end of 1931, the violence had become very intense. Bruning was forced to act and issued a decree banning the wearing of political uniforms. But, this had little effect as the SA continued to march wearing white shirts. Therefore, in April 1932, Hindenburg was persuaded to pass a law outlawing the SA. But, this law didn't do a lot - their membership grew and political violence was not brought under control.