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The Great Depression What happened? What happened? What caused the Great Depression? What caused the Great Depression? Impact on Germany Impact on Germany.

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Presentation on theme: "The Great Depression What happened? What happened? What caused the Great Depression? What caused the Great Depression? Impact on Germany Impact on Germany."— Presentation transcript:

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2 The Great Depression What happened? What happened? What caused the Great Depression? What caused the Great Depression? Impact on Germany Impact on Germany

3 Great Depression was the economic event of the 20 th Century…. 24 th October Black Thursday, panic selling on the Stock Exchange 24 th October Black Thursday, panic selling on the Stock Exchange Black Tuesday 29 th October panic selling continued and 16.4 million shares sold. Prices came crashing down. Black Tuesday 29 th October panic selling continued and 16.4 million shares sold. Prices came crashing down.

4 What happened? The stock market was an important source of funding for industry The stock market was an important source of funding for industry Stock prices are based on estimates of future earnings potential – the 1920s tells a story of optimism for the future. Stock prices are based on estimates of future earnings potential – the 1920s tells a story of optimism for the future. Rising stock dividends – huge interest from a variety of investors increased stock prices Rising stock dividends – huge interest from a variety of investors increased stock prices

5 Increase in wages, Americans has surplus money to save or invest Increase in wages, Americans has surplus money to save or invest Banks had money that was easily more available – took out loans to buy stock. Banks had money that was easily more available – took out loans to buy stock. Lack of stock market regulations: practiced buying on margin buying stock on credit put a down payment on stock and then wait to receive the profit to pay the rest of the stock. – speculative investing. Lack of stock market regulations: practiced buying on margin buying stock on credit put a down payment on stock and then wait to receive the profit to pay the rest of the stock. – speculative investing.

6 The Depression affected different industrialised countries in different ways … Historians often use the First World War as a starting point. Why? Historians often use the First World War as a starting point. Why? The war made it impossible for Europe to maintain its previous levels of production. For example, France, Brit and Germany did 60% of the exports of manufactured goods The war made it impossible for Europe to maintain its previous levels of production. For example, France, Brit and Germany did 60% of the exports of manufactured goods

7 Most of their markets were in America and Japan Most of their markets were in America and Japan At the end of the war, Europe was forced to import food from America. At the end of the war, Europe was forced to import food from America. America was going from a traditional debtor to a creditor – had financed the war and had loaned money towards its reconstruction America was going from a traditional debtor to a creditor – had financed the war and had loaned money towards its reconstruction

8 This had increased the number of financiers – eager to give loans out and using unsound lending practices. This had increased the number of financiers – eager to give loans out and using unsound lending practices. The main objective was to do the most business The main objective was to do the most business

9 The Cataclysmic collapse of world trade Many leading industrialised nations responded to the crisis by imposing trade barriers on imports Many leading industrialised nations responded to the crisis by imposing trade barriers on imports It was hoped that this would increase demand for domestic goods and raise revenue from tariffs (taxes imposed on imports) It was hoped that this would increase demand for domestic goods and raise revenue from tariffs (taxes imposed on imports) These increased taxes had the effect of reducing spending and in turn reducing employment These increased taxes had the effect of reducing spending and in turn reducing employment

10 How did the Depression affect Germany? The Weimar Republic was devastated by the Wall Street Crash The Weimar Republic was devastated by the Wall Street Crash America had propped up the Weimar Republic with huge loans in 1924 : Dawes Plan and the Young Plan. America had propped up the Weimar Republic with huge loans in 1924 : Dawes Plan and the Young Plan. America needed those loans back to assist her own faltering economy. America requested the loan to be repaid in 90 days! America needed those loans back to assist her own faltering economy. America requested the loan to be repaid in 90 days!

11 Stresemann had admitted that the German economy was fragile: Stresemann had admitted that the German economy was fragile: The economic position is only flourishing on the surface. Germany is in fact dancing on a volcano. If the short term credits are called in, a large section of our economy would collapse

12 Europe still in chaos – no other European country could provide money like the US did. Europe still in chaos – no other European country could provide money like the US did. Companies through- out Germany went bankrupt and workers lost their jobs. Companies through- out Germany went bankrupt and workers lost their jobs.

13 Effects on Germany By 1932 approx one worker in three was registered as unemployed. By 1932 approx one worker in three was registered as unemployed. Drastic falls in income caused a collapse in tax revenue and many were unable to claim unemployment benefits – as the government could not afford to pay it. Drastic falls in income caused a collapse in tax revenue and many were unable to claim unemployment benefits – as the government could not afford to pay it.

14 It was in this economic chaos that the Nazis and Communists thrived… Nazi election poster 1932 Communist poster End the System

15 Crime and suicide rates rose sharply Crime and suicide rates rose sharply 1930s election: Nazis made a breakthrough winning 107 deputies 1930s election: Nazis made a breakthrough winning 107 deputies The Communists won 77 deputies The Communists won 77 deputies Both parties opposed democracy and used violence against their political opponents. Both parties opposed democracy and used violence against their political opponents. Hitlers brown shirts clashed with their Communist enemies Hitlers brown shirts clashed with their Communist enemies

16 His nickname was the hunger Chancellor….. Heinrich Bruning (between 1930 – 1932) Heinrich Bruning (between 1930 – 1932) Government spending was cut to keep inflation down and exports competitive Government spending was cut to keep inflation down and exports competitive Increased taxes, reduced salaries and reduced unemployment assistance. Increased taxes, reduced salaries and reduced unemployment assistance. Given his unpopularity, Bruning found it difficult to form a majority in the Reichstag. Given his unpopularity, Bruning found it difficult to form a majority in the Reichstag. Relied heavily on Article 48. Govt being ignored Relied heavily on Article 48. Govt being ignored he was so unpopular, that when he travelled by train he had to keep the blinds down As people caught sight of him, they threw rocks!!!

17 The end of Parliamentary democracy President Hindenburg lost confidence in Bruning and quarrelled a variety of reforms President Hindenburg lost confidence in Bruning and quarrelled a variety of reforms Some of the Presidents advisors: General Kurt von Schleicher wanted to include the Nazis in the government. Some of the Presidents advisors: General Kurt von Schleicher wanted to include the Nazis in the government. Bruning opposed this and was succeeded by Franz Von Papen (who was equally unpopular) Bruning opposed this and was succeeded by Franz Von Papen (who was equally unpopular) General Kurt von Schleicher Became chancellor in Dec 1932 – 1933

18 1932 Elections The results for Weimar Germany was a disaster. A majority of Germans voted for non- democratic parties. The results for Weimar Germany was a disaster. A majority of Germans voted for non- democratic parties. A senior NAZI official, Gregor Strasser, claimed that what was a disaster for Weimar was good, very good for us A senior NAZI official, Gregor Strasser, claimed that what was a disaster for Weimar was good, very good for us Hitler proved adept at using modern technology. He also recognised the power Of the radio ahead of many other politicans

19 The results speak ….. Communist party (KPD), Social Democrat party (SDP), Catholic centre Party Nationalist Party (DNVP), Nazi party (NSDAP),

20 Despite Hitler being the leader of the largest party, Hindenburg had contempt for the little corporal Despite Hitler being the leader of the largest party, Hindenburg had contempt for the little corporal Hindenburg chose his own Chancellor: Franz von Papen Hindenburg chose his own Chancellor: Franz von Papen 1932, the Reichstag overwhelmingly expressed its no confidence in his leadership. He called another election to get more support His support only decreased further. 1932, the Reichstag overwhelmingly expressed its no confidence in his leadership. He called another election to get more support His support only decreased further. Franz von Papen – equally Unpopular-has no support From his fellow cabinet members

21 Hitler demanded to be made Chancellor. Hitler demanded to be made Chancellor. 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 Chancellor) 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 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 support of the Reichstag and was incredibly popular with the Germany population Hindenburg was finally convinced that Hitler was the only way. He had the support of the Reichstag and was incredibly popular with the Germany population On January 30 th 1933 Hitler was summons to Hindenburgs chambers and was sworn in as Chancellor On January 30 th 1933 Hitler was summons to Hindenburgs chambers and was sworn in as Chancellor Hindenburg expected Von Papen to control Hitler – giving necessary guidance to one not experienced. Of course, this was not the case. Hindenburg expected Von Papen to control Hitler – giving necessary guidance to one not experienced. Of course, this was not the case. The democratic experience in Germany had come to an end with the declaration of the Enabling Act. The democratic experience in Germany had come to an end with the declaration of the Enabling Act.


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