How successful was the Weimar Republic in dealing with its economic and political problems?
Between 1923-1929 the influential politician Gustav Stresemann had helped to bring greater economic stability to Germany. However, this stability was not based on firm foundations. Much of Germany’s new wealth came in the form of American short-term loans. As long as the American economy did well, so would Germany’s. But, if America’s economy were to collapse, the results for Germany would be catastrophic. Stresemann himself recognised this problem, saying Germany was ‘dancing on a volcano’.
1. Describe in your own words, why the economic stability that Germany achieved between 1923-29
was not based on firm foundations.
In October 1929, an economic disaster struck America. At the New York Stock Exchange on Wall Street, the value of American shares collapsed, following a few days of wild speculation. This event is known as the Wall Street Crash. Many US businesses were ruined, and unemployment soon became a serious problem in the USA. Many countries relied upon American investment and loans and therefore the Crash led to a worldwide depression, known as the Great Depression.
Many countries suffered in the Great Depression, but Germany suffered the most. As American businesses were collapsing, America decided to call in the loans they had given to Germany under plans such as the Dawes Plan of 1924. This meant they could demand that Germany pay all the money back that she had borrowed – immediately! This led to thousands of German businesses going bankrupt. Many other US companies had invested in Germany, e.g. by setting up factories there. They now had no choice but to withdraw their investments, leading to more German factories having to close.
2. What was the Wall Street Crash? Why did it affect countries worldwide?
3. Why did Germany suffer so terribly after the Wall Street Crash?
Huge numbers of German workers had to be laid off, and the number of unemployed in Germany rose rapidly, reaching 6 million unemployed by the end of 1932. That meant that 1/3 of the entire German workforce was unemployed. Factory workers suffered terribly. 40% of all factory workers were unemployed by 1932. By 1933, young people were feeling the depression badly. Over half of all Germans aged 16-30 were unemployed by 1933. Even graduates suffered, with 60% of new university graduates being unable to find a job. Farmers had been doing badly before the depression, as prices for their produce had been falling since 1925, but now their debts increased even more. Many businessmen saw their businesses close as the public had less money to spend on consumer goods. Even those who did not lose their jobs did badly. Wages were cut, and taxes rose.
The scale of the unemployment problem totally overwhelmed Germany’s unemployment insurance scheme. The government could only afford to provide unemployment benefit for 30% of those who needed it, and even then they had to cut the amount of benefit they paid out. Many had to rely on emergency handouts. Soup kitchens were set up to feed those that could not afford to feed themselves. For the unemployed, this was a time of extreme poverty.
This poverty led to a large number of homeless families, as people could no longer afford their rent. Many public parks became large camps or ‘shanty towns’ for the homeless. People stayed here so long that the tents were numbered, and arranged in neat rows, which had names, like streets. They even had children’s playgrounds and communal kitchens.
The result of this poverty was despair. Millions of Germans resented the Weimar government, saying it was not doing enough to help. The government was scared of spending its way out of the crisis, e.g. by increasing unemployment benefit in case it led to hyperinflation. People became ‘doubly bitter’. The Government had caused economic chaos in 1923 and seemed to be doing so again. This was the second time that the government had seriously let them down.
5. Use the information above to explain in detail how the depression affected the people of Germany.
You make like to complete this in the form of a diagram or chart.
The crisis made the government seem weak and divided. For example, in 1929 a coalition government collapsed as the two main parties argued over whether or not to reduce unemployment benefit. Arguments became so frequent that the President began increasingly to rule by decree, using article 48. This stated that the President could pass laws without asking the Reichstag’s (Government’s) approval in times of emergency.
President Hindenburg was 84, and well past his prime. The public were losing faith in him.
Reminder
Article 48 said that in an emergency or a crisis, the President could sack the Chancellor, ignore the views of all the politicians in the Reichstag, and rule in any way he wanted to, including using the force of the army. Article 48 gave the President enormous power and its use undermined democracy.
Many Germans desperately felt that something must be done to solve the crisis. In times of extreme hardship and trouble many people are prepared to take extreme measures to achieve their goals. The democratic parties seemed to offer few solutions, but the Communists and the Nazis did.
The Communists said the Depression showed the capitalist world was doomed to failure, and only Communism had the answer. The Communists wanted greater equality amongst the classes and to redistribute wealth. All over Europe, this message led to growing support for Communism amongst the working class. Between 1928 and 1932 the Communists doubled their seats in the Reichstag, and became the third most popular party in Germany. This terrified many Germans (especially the upper and middle classes) who feared Communism, especially after the street fighting between the SA and Communist gangs in the 1932 elections, which left 500 people dead.
The Nazis blamed the Depression on the Weimar Republic, the Treaty of Versailles, the Communists, and the Jews. They promised to destroy these ‘enemies within’ who were destroying German society. For every problem, the Nazis seemed to have a solution:
§ The Weimar Republic is weak – you need strong leadership. Hitler could be that leader.
§ Unemployment – The Nazis will get people back to work by setting up road building and public work schemes.
§ The Threat of Communism – the SA are the only ones who have the strength and knowledge to deal with the Communists.
6. Use the information above to explain how the impact of the depression affected ordinary people’s
attitudes towards politics and political parties.
Hitler was appointed Chancellor in January 1933. He headed a coalition government in which there were only three other Nazis, yet by July Germany had become a one-party state. Hindenburg as President was too old and weak to exert any real influence. By 1935 Hindenburg was dead and Hitler was declared Fuhrer – Leader – of Germany.