Weimar Germany: Wall St Crash Edexcel History 2A

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Key Features

  • October 1929, share prices fell on Wall Street stock exchange in New York.
  • This meant that investments fell in value.
  • Therefore, people ran to sell shares before they fell further.
  • On 'Black Thursday', 24 October, 13 million shares were sold. This panic sent prices even lower.
  • Shares worth $20 000 in the morning were worth $1000 by the end of the day.
  • Within a week, investors lost $4000 million.
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Economic Effects

  • Banks were major investors and suffered huge losses.
  • germany banks lost so much money, people feared they couldn't pay money out in bank accounts.
  • People rushed to get their money back, causing some banks to run out of cash.
  • America needed their loans returned and so did Germany banks from loaning money to companies, which were dependent on the loans, so operations were either reduced or closed.
  • Industrial output fell and unemplyment rose.
  • Worldwide depression was caused.
  • High employment meant domestic demand for goods fell, and unemployment fell further.
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Social & Political effects

  • The middle class lost savings, companies and homes.
  • Workers became unemployed.
  • Weimar government  failed when political action was demanded.
  • Taxes were raised to pay the cost of unemployment benefit, and reducing the unemployment benefit so payments were more affordable.
  • Left wing parties and working classes opposed lower unemployment benefits.
  • Right wings and middle classes opposed higher taxes.
  • The coalition of parties that Bruning's government depended on collapsed in 1930. He could only govern by decree.
  • There'd only been 4 decrees in 1930. In 1931, there were 44, and in 1932, there were 66.
  • Confidence in the government diminished.
  • Bruning resigned in 1932; he lost control of the Reichstag, the economy and the streets.
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