Weimar Republic and the Great Depression

Weimar Republic and the Great Depression

The Weimar Republic was devastated by Wall Street Crash of October 1929 and the Great Depression that followed. The Crash had a devastating impact on the American economy but because America had propped up the Weimar Republic with huge loans in 1924 (the Dawes Plan) and in 1929 (the Young Plan), what happened to the American economy had to impact the Weimar Republic's economy.

Both plans had loaned Weimar money to prop up the country’s economy - especially after the experiences of hyperinflation in 1923. Now America needed those loans back to assist her faltering economy.

Stresemann had died in 1929, but shortly before he died even he admitted that the German economy was a lot more fragile than some would have liked to accept.

"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."

After the Wall Street Crash, America gave Germany 90 days to start to re-pay money loaned to her. No other world power had the money to give Germany cash injections. Britain and France were still recovering from the First World War and the Wall Street Crash was to have an impact on industrial Britain. Stalin’s Russia was still in a desperate state and embarking on the 5 year plans. Therefore, an impoverished Weimar Germany could only call on America for help and she was effectively bankrupt by the end of 1929 and quite incapable of lending money.

Companies throughout Germany - though primarily in the industrial zones such as the Ruhr - went bankrupt and workers were laid off in their millions. Unemployment affected nearly every German family just 6 years after the last major economic disaster - hyperinflation - had hit Weimar.

September 1928

650,000 unemployed

September 1929

1,320,000 unemployed

September 1930

3,000,000 unemployed

September 1931

4,350,000 unemployed

September 1932

5,102,000 unemployed

January 1933

6,100,000 unemployed

Most, though not all, of the unemployed were male. These men were almost certainly family men who could see no way ahead with regards to providing for their families. Money was required for food, heating a home, clothes etc. With no obvious end to their plight under the Weimar regime, it is not surprising that those who saw no end to their troubles turned to the more extreme political parties in Germany - the Nazi and Communist Parties.

In 1928, the Nazi Party had nearly gone bankrupt as a result of the spending on street parades etc. which had cost the party a great deal. Bankruptcy would have automatically excluded them from politics - they were saved by a right wing businessman called Hugenburg who owned a media firm in Germany. He financially bailed them out.

In the 1930 Reichstag election, the Nazis gained 143 seats - a vast improvement on their previous showing. Hitler only expected between 50 to 60 seats. A senior Nazi official, Gregor Strasser, claimed that what was a disaster for Weimar was "good, very good for us." 

In the July 1932 Reichstag election, the Nazis gained 230 seats making them the largest party in the Reichstag. 

In the same year, Hitler had challenged Field Marshall von Hindenburg for the presidency. Such a move in 1928 would have been laughable but in the presidential election Hitler gained 13,400,000 votes to Hindenburg’s 19,360,000. Thalman, the leader of the Communists, gained 3,700,000. By any showing, Hitler’s achievement in this presidential election was extremely good for a politician whose party was on the verge on bankruptcy just 4 years earlier - but it also showed the mood of the German people in the early 1930’s. 

In the November 1932 Reichstag election, the Nazi Party dipped somewhat to 196 seats but this still put them way ahead of their nearest rivals, the Social Democrats on 121 seats.

The Communist Party continued its steady climb from 77 seats the 1928 election, to 89 in the July 1932 election to 100 in the November one.

How did Hitler become chancellor in January 1933?

Despite Hitler being the leader of the largest political party in the Reichstag, Hindenburg had nothing but contempt for "the little corporal". In keeping with the constitution, Hindenburg selected his own chancellor - Franz von Papen. His support in the Reichstag came from the Centre Party, who in July 1932 only gained 97 seats. However, with the backing of the president and the constitution, von Papen could push through legislation. However, in September 1932, the Reichstag overwhelmingly expressed its no confidence in his leadership by 513 votes to 32. He called the November ’32 election in an attempt to get more support within the Reichstag. The number of Centre Party seats dropped to 70. It was clear that von Papen had barely any support in the Reichstag.

After the results of the November election were announced, Hitler again demanded to be made chancellor. Again, Hindenburg refused. However, this time the army via General Kurt von Schleicher, informed Hindenburg that any continuation of von Papen’s leadership could lead to civil war. It was made clear to the elderly President that the army did not support von Papen. As a result of this, Hindenburg appointed von Schleicher chancellor – a man whose only experience was in the military as opposed to politics.

Why did Hindenburg do this? 

By 1933, he could been suffering from some form of dementia but it is also likely he had an instinctive alliance with the army, so he felt that he could work with a general rather than a politician. Why did Schleicher accept a position he was hopelessly prepared for ? It is probable that he simply responded to an order by a superior officer or that he wanted to use the opportunity of chaos in Germany to advance the power of the army in the country. Regardless of this, he only last 57 days as chancellor. He had no support from the Reichstag and Hindenburg had to dismiss him.

The only person with any form of credibility left was Hitler. He had the support of the Reichstag and his party was the most popular in Germany. On January 30th 1933, Hitler was summoned to Hindenburg’s chambers and sworn in as chancellor. Hindenburg expected the vice-chancellor- von Papen - to control Hitler as one had the experience of leading the nation while the other did not. Within one month, Hitler would be on the way to dictatorial power.






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