How did the Depression of the 1930’s impact upon Germany?

1. How did the Depression of the 1930’s impact upon Germany? Sally Wu and Kakei Hon

2. "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." – Stresemann

3. Economics • Hyperinflation. In January, 1921, there were 64 marks to the dollar. By November, 1923 this had changed to 4,200,000,000,000 marks to the dollar. • Companies throughout Germany went bankrupt • America gave Germany 90 days to start repaying the money loans to her • Banks failed – savings accounts were instantly wiped out • Devaluation of the mark • The passage of the Smoot-Hawley Tariff Act in the US in 1930 prevented Germany industries from importing their goods into America, thus contributing to the collapse of Germany’s international trade • On the 24th October 1929, “Black Thursday”, there was panic selling on the New York Stock Exchange reacting to a business crisis in America. Early the following week, “Black Tuesday”, 29th of October, panic selling set in again. 16.4 million shares were sold, a record not surpassed for forty years. Share prices went into freefall. Ten billion dollars was wiped off the value of share prices in one day. • Firms began to cut back drastically. Industrial production fell quickly and by 1932 it was 40% of its 1929 level

5. Social • Workers were laid off in their millions • Unemployment affected nearly every German family • Most of the unemployed were male • Now that they have lost their job, they can no longer provide their family what they need: food, heating, clothes etc • Unemployment rose to 30% by 1932

6. Social • Desperate, many turned to more extreme political parties in Germany – Nazi and Communist • In 1928, the Nazi Party had gone bankrupt as a result of spending too much on street parades – saved by a right wing businessman Hugenburg • In the 1930 Reichstag election, the Nazi party gained 143 seats – Hitler only expected 50-60 • In the July 1932 Reichstag electron, the Nazi party gained 230 seats, making them the largest party in the Reichstag • In the 1932 presidency electron, Hitler gained 13,400,000 in comparison to Hindenberg’s 19,360,000

7. Foreign Policy • Reparations repayment policies were abolished after Germany promised to pay the final 2.6 million marks to the European Reconstruction fund, Germany only paid 1/8 of the Reparations intended to be paid • Germany was allowed to get away with annexation as people only saw this as taking back what they have lost • Germany withdrew from the League of Nations • Franco-German Saar agreements were signed were the Saar Territory was given to Germany

8. Military Policy • Disarmament Conference – Germany was allowed to increase army to 200,000 men and an air force half of the size of the French • Germany started re-arming in 1935 and increased its army to 400,000 men • Anglo-German naval agreement allowed Germany to build a navy which is 35% of Britain’s navy, this agreement was made because of France siding with the Soviet Union, making Britain suspicious

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