Unit 2C
germany
The Great Depression
By 1932 six million Germans were unemployed (compared to 0.8 million in 1928).
Economic impact on Germany
Wall Street Crash, USA, October 1929
US companies lost billions of dollars in value
overnight. Many banks and businesses were ruined.
The Great Depression
The Crash triggered a worldwide recession.
Germany suffered very badly.
US stopped lending money to Germany
and demanded all loans be repaid.
Wall Street Crash
German businesses
• Had to pay back loans.
• Had no more investment from the US.
• Had to pay increased taxes to
government.
• Worldwide, no one had money to buy
goods, so markets dried up.
The Depression
in Berlin
German government
• Couldn’t borrow money from the US.
• Refused to print more money.
• Increased taxes.
• Made cuts in unemployment benefit.
• Government workers had wages cut
and some lost their jobs.
German people
• Businesses reduced staff or closed.
• Millions of workers and farm labourers lost their jobs.
• Young people were badly affected by job losses.
• With no work, and benefits slashed, families suffered terrible poverty.
Political impact
The Depression had a deep political impact.
•The Weimar government was blamed for
German dependence on US loans.
•It highlighted a lack of strong leadership
(Stresemann had died just before the
Crash).
•The two main parties in the coalition
government (Centre Party and SDP) could
not agree how to solve the crisis.
Jot down at least three ways in which
the Depression was different from
hyperinflation.
70
•President Hindenburg used Article 48
of the constitution to pass laws without
Reichstag agreement. In effect, Germany
was no longer a democracy.
•New economic policies were very
unpopular.
•Extremist parties (especially the communists
and Nazis) became more popular.
nce
Be sure you understand the differe
the
between hyperinflation in 1923 and
Depression in the 1930s.