Presentation on theme: "What happened? What caused the Great Depression? Impact on Germany"— Presentation transcript:
1What happened? What caused the Great Depression? Impact on Germany
2Great Depression was the economic event of the 20th Century…. 24th October “Black Thursday”, panic selling on the Stock Exchange“Black Tuesday” 29th October panic selling continued and 16.4 million shares sold. Prices came crashing down.
3What happened?The stock market was an important source of funding for industryStock prices are based on estimates of future earnings potential – the 1920’s tells a story of optimism for the future.Rising stock dividends – huge interest from a variety of investors increased stock prices
4Increase in wages, Americans has surplus money to save or invest 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.
5The Depression affected different industrialised countries in different ways … 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
6Most of their markets were in America and Japan 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
7This 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”
8The Cataclysmic collapse of world trade Many leading industrialised nations responded to the crisis by imposing trade barriers on importsIt 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
9How did the Depression affect Germany? The Weimar Republic was devastated by the Wall Street CrashAmerica 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!
10Stresemann 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”
11Europe 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.
12Effects on GermanyBy 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.
13It was in this economic chaos that the Nazis and Communists thrived… 19321932 Nazi election poster1932 Communist poster“End the System”
14Crime and suicide rates rose sharply 1930s election: Nazis made a breakthrough winning 107 deputiesThe Communists won 77 deputiesBoth parties opposed democracy and used violence against their political opponents.Hitler’s brown shirts clashed with their Communist enemies
15His nickname was the “hunger Chancellor”….. Heinrich Bruning (between 1930 – 1932)Government spending was cut to keep inflation down and exports competitiveIncreased taxes, reduced salaries and reduced unemployment assistance.Given his unpopularity, Bruning found it difficult to form a majority in the Reichstag.Relied heavily on Article 48. Govt being ignored“he was so unpopular, that when he travelled by train he had to keep the blinds downAs people caught sight of him, they threw rocks!!!”
16The end of Parliamentary democracy President Hindenburg lost confidence in Bruning and quarrelled a variety of reformsSome of the President’s 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)Became chancellor in Dec 1932 – 1933General Kurt von Schleicher
171932 ElectionsThe 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”Hitler proved adept at using moderntechnology. He also recognised the powerOf the radio ahead of many other politicans
18The results speak …..Communist party (KPD), Social Democrat party (SDP), Catholic centre PartyNationalist Party (DNVP), Nazi party (NSDAP),
19Despite Hitler being the leader of the largest party, Hindenburg had contempt for the “little corporal”Hindenburg chose his own Chancellor: Franz von Papen1932 , 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 – equallyUnpopular-has no supportFrom his fellow cabinet members
20Hitler 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)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 populationOn January 30th Hitler was summons to Hindenburg’s chambers and was sworn in as ChancellorHindenburg 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.