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Europe & The Great Depression of the 1930’s. Chapter 27. Toward the Great Depression. 1920’s > “roaring” in the US 1929 severe downturn High unemployment Minimal trade Low Production Fight for economic security Governments abandon market economy > lean toward mixed economy
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Europe & The Great Depression of the 1930’s Chapter 27
Toward the Great Depression • 1920’s > “roaring” in the US • 1929 severe downturn • High unemployment • Minimal trade • Low Production • Fight for economic security • Governments abandon market economy > lean toward mixed economy • More govt. involvement • 3 reason for severity and length of depression • Financial crisis from war & peace settlement • Crisis in production & distribution of goods in world market • Lack of leadership from major powers
Financial Tailspin • Uncontrolled inflation • Nations seek to keep value of their currency • Germany > example • War-debt another issue • France & US sought reparations aggressively • Germany > main target for money • Reparations made normal business difficult • Small trade & low production > increases unemployment • American investments • Dawes Plan > smoothed debt payments • US > loaning money > loans invested in the stock market > crash > major issue • No more loaning money (Europe) > US can barely solve its own problems • End of reparations • German economy on the edge of collapse • Herbert Hoover gives one-year moratorium > prelude to the end of reparations > official in 1932
Problems in Agricultural Commodities • Market for European goods shrinks in the 1920’s • Why? • Improved farming methods across the globe • World supply of grain increases • Trouble for European farmers • Goods they used more expensive • Prices for their commodities plummeted • Result > stagnation & depression
Depression & Government Policy • New economic sectors develop • Automobiles • Radios • Synthetics • Service industries • People working are frustrated > not moving up the ladder • Governments not fit to confront problems • New economic thought emerges • Based on John Maynard Keynes • Govt. needs to step in when market is in a downturn • More govt. spending to stimulate economy • Private enterprise now subject to regulations
Confronting the Great Depression in the Democracies • Political life changes in Great Britain and France • Great Britain • New coalition govt. • Abandonment of old sacred economic policies • France • Creation of political and economic program
Great Britain: The National Govt. • 1929 > unemployment > major issue • Labour party in charge > what to do? • Ramsay MacDonald > prime minister • Slash budget • Reduce govt. salaries • Cut unemployment benefits • MacDonald forms coalition ministry made up of labour, liberal, and conservatives called the National Govt. • Tried to balance budget • Britain went off the gold standard • Import Duties Bill • Britain first to restore production in Europe (1934) • Unemployment persisted • Neville Chamberlain takes over in 1937 • Seen as a more progressive thinker
France: The Popular Front • Not affected by depression until 1931 • Major problem > industrial stagnation • Coalition Govt. (radical) > lower govt. spending & increase interest rates • Reparation payments end • Right wing violence • Groups favoring monarchy or military rule grew • Resembled fascists in Italy • Reeked havoc on political life • Stavisky Affair > showed corruption in rep. govt. • Left wing cooperation • Popular Front est. 1935 > coalition of left wing parties • Controlled govt. under Leon Blum • Pursued socialism through democratic govt. • Blum’s Govt. • Labor strikes > major problem • Blum > raised wages, recognized unions, est. 40 hr. work week, govt. loans to small industry, etc. • Pressure causes halt in reform • Political life in jeopardy again > no faith in republic
Germany: The Nazi Seizure of Power • Most remarkable political event stemming from Great Depression • National Socialists (Nazis) coming to power • Took advantage of fragile economy and Weimar constitution
Depression and Political Deadlock • 1928 end of parliamentary govt. in Germany • Coalition of parties governed • Dissolves in 1930 > could not solve economic issues • President > Hindenburg • Chancellor > Heinrich Bruning • Bruning governs through decrees • Weimar Republic becomes authoritarian regime • Unemployment rises to 6 million in 1930 • Nazis gain seats in Reichstag • Use terror & intimidation • Gain power legally through impressive electoral results
Hitler Comes to Power • 1932 Hindenburg up for reelection • Hitler runs against him > loses narrowly in a run off • Franz Papen made chancellor • Govt. needs support Nazis have • Nazis gain more seats in Reichstag • Papen resigns > Kurt Schleicher takes over • Tried to gain Nazi support without Hitler • Fails > political disorder in Reichstag • No support from Hindenburg Schleicher resigns • Hitler becomes chancellor in 1933 • Occurs b/c of political turmoil created by depression • Draws support from farmers, war veterans, and the young • Promise of security and effective govt. > also restore Germany to power • Not afraid to address issues in Germany
Hitler’s Consolidation of Power • Moves quickly to consolidate control • Capture full legal authority • Crush alternative political groups • Purge rivals within • Reichstag fire • Excuse to take care of communist threat • Under Article 48 issues an emergency decree to suspend civil liberties • Enabling Act • Hitler could now rule by decree > no limits • Eliminates all potential opposition • Party Purges • SA officers a threat > so they are killed • Hindenburg dies • Hitler combines both offices > becomes sole ruler
The Police State and Anti-Semitism • Germany becomes a police state • Police surveillance > SS • Lead by Himmler > very close to Hitler • Previously they were Hitler’s bodyguards • Jews main target of terror • Nuremburg Laws > robbed Jews of citizenship • Who is defined as a Jew? • Depends on the number of Jewish parents & grandparents • Very complex • Kristallnacht • Jews forbidden to engage in business • Nov. 9 and 10, 1938 Jewish businesses and synagogues burned • Final Solution
Racial Ideology & the Lives of Women • Women’s job • Reserve racial purity • Give birth to pure Germans • Only certain women seen as racially fit to give birth • Policy of selective breeding • Focus is on the state not individual • Nazi legislation gave breaks to families who followed this policy • Nazis protected women’s jobs • Pursue jobs “natural” to their character • Examples? • Women seen as the protector of German cultural values
Nazi Economic Policy • Hitler successful at attacking unemployment • This success gave his regime credibility • Give up political and civil liberties and you can achieve full employment • Major programs of public works and spending • Most related to rearmament • Improved transportation (for military) • Govt. controlled all aspects of economy • 1935 Germany renounces Treaty of Versailles
Italy: Fascist Economies • Fascists sought to stabilize social & economic life • Mussolini attempts to make Italy self-sufficient • Depression > obstacle > production, exports, and wages fell • Economic policy > corporatism • Medium between socialism and liberalism • Private ownership of capital • Govt. arbitration of labor disputes • Syndicates formed > made up of labor and management • After 1930, syndicates reorganized into corporations • Group industries into a major area > example > agriculture • 22 in total • Chamber of Deputies replaced > Chamber of Corporations • Govt. now has more control not owners and consumers • 1935 Italy invades Ethiopia • League of Nations issue economic sanctions
Stalin’s Soviet Union • Russia experienced industrial advance during the Great Depression • Economic growth achieved through the death of millions
The Decision for Rapid Industrialization • Stalin’s Goal? • Overtake the productive capacity of its enemies • Build up industries, such as iron, steel, electricity, etc. • Organized five year plans • Gosplan > set goals and work to achieve them • Rapid expansion of industry • Large factory labor force • Workers lived in deplorable conditions • Used propaganda to ensure cooperation • Appealed to the young • Production grew rapidly • From 1928 to 1940 > rose 400% • Human cost for this was appalling
The Collectivization of Agriculture • Agricultural productivity had always been a problem • When the govt. bought grain, they set prices > leads to hoarding • Stalin’s solution? • Collectivize grain and other products for domestic use and foreign export (collectivization) • Huge state run farms > collectives • Blamed kulaks (small prosperous peasant farmers) for economic problem with the grain issue • Eventually, sought to eliminate them • Caused chaos and violence in the countryside • Peasants who resisted outright were killed • Result? • Millions dead • Still could not produce enough food
Flight to the Soviet Cities • 12 million peasants flee the countryside • Many move to the cities • Urban population grows rapidly • Huge migration is a direct result of the violence the govt. inflicted on the countryside
Urban Consumer Shortages • Housing issue • Many workers lived in barracks • Cramped apartments • Shortage of food and clothes • Consumed less food than the Russian Revolution • City infrastructure was lacking • Poor transportation and sewerage • Water and electricity were issues • Crime and disease widespread • Mode of coping known as the blat
Foreign Reactions & Repercussions • Capitalist nations shocked at the how quickly the Soviet economy had grown • Foreign policy shift • Stalin afraid of Nazi Germany • Allows communist parties to cooperate with non communist parties against fascism
The Purges • Stalin’s policies aroused internal opposition • Opposition found amongst lower level parties • Stalin’s paranoia leads to the Great Purges • Most mysterious and horrendous political events of the 20th century • Pretext > assassination of Sergei Kirov • Prior sabotage and disloyalty was met with death • Show trials 1936-38 held in Moscow • Included former high soviet leaders killed • Lower level party members killed • Possibly millions of ordinary citizens killed > no trial • Then came govt. officials and members of the military • Justification? • Settle old scores and create discipline • Fear for his own power and ruthless determination to preserve and increase it