Great Depression
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries, it started in 1929 and lasted until the late 1930s. It was the longest, de…
Full Answer
How did the Great Depression change Germany politically?
The Great Depression and the Versailles Treaty enabled Hitler's rise to power in Germany. Germany was forced to assume all blame for the war—a war which it did not start. Germany also lost valuable industrial sections of the country to France, and some of its eastern territory was lost to recreate Poland.
How did Germany respond to the global depression?
In Germany, the Depression left six million people, more than one-third of the working population, without a job. 4. The government of Heinrich Bruning failed to respond effectively to the Depression, passing tax increases and spending cutbacks rather than attempts to stimulate the economy.
How did the Berlin Wall effect Germany?
The wall also didn't allow people to leave or come into East or West Germany. The wall also affected the people in Germany. The Germans could not visit their family and friends on the other side of the Berlin Wall. Families were separated and they would not see each other again for a long time.
How did the CCC affect the Great Depression?
CCC and the New Deal. The CCC was part of his New Deal legislation, combating high unemployment during the Great Depression by putting hundreds of thousands of young men to work on environmental conservation projects. The CCC combined FDR's interests in conservation and universal service for youth.
How did the Great Depression affect Germany's economy?
A depression is a severe economic downturn that forces businesses to decrease production and lay off workers. Germany felt the effects of the depression almost immediately. By 1932, 6 million Germans were unemployed in a nation of about 60 million people.
How was the German economy during the Great Depression?
Unemployment rose to three million during the course of the year. By the winter of 1932 it reached six million. Germany's industry was working at no more than 50 percent of its capacity, and the volume of German foreign trade fell by two-thirds between 1929 and 1932.
How was the German economy hit by the Great?
The Great Depression—which consumed the entire globe—hit Germany particularly hard. Hyperinflation essentially ruined the economy and led to Hitler's rise.
What were the causes of economic crisis in Germany?
Germany's economy suffered badly after the Wall Street Crash of 1929. Germany was particularly badly affected by the Wall Street Crash because of its dependence on American loans from 1924 onwards. As the loans were recalled, the economy in Germany sunk into a deep depression. Investment in business was reduced.
Did the Great Depression caused hyperinflation in Germany?
According to one study, many Germans conflate hyperinflation in the Weimar Republic with the Great Depression, seeing the two separate events as one big economic crisis that encompassed both rapidly rising prices and mass unemployment. The hyperinflated, worthless marks became widely collected abroad.
How did the Great Depression affect Germany and France?
How did the Great Depression affect Germany and France? The Weimar Republic of Germany experienced severe inflation and unemployment rose to more than 4 million people; France experienced political unrest, with six different cabinets formed in a 19-month period.
What was an impact of the Great Depression on Germany Brainly?
The impact of the Great Depression was particularly severe in Germany, which had enjoyed five years of artificial prosperity, propped up by American loans and goodwill. Unemployment hit millions of Germans, as companies shut down or downsized. Others lost their savings as banks folded.
When did Germany's economy collapse?
From late 1944 on, Allied bombings were destroying German factories and cities at a rapid pace, leading to the final collapse of the German war economy in 1945 (Stunde Null).
How did the Great Depression affect Germany and France?
How did the Great Depression affect Germany and France? The Weimar Republic of Germany experienced severe inflation and unemployment rose to more than 4 million people; France experienced political unrest, with six different cabinets formed in a 19-month period.
When did Germany's economy collapse?
From late 1944 on, Allied bombings were destroying German factories and cities at a rapid pace, leading to the final collapse of the German war economy in 1945 (Stunde Null).
What were the main factors responsible for the economic crisis in Germany during 1920s?
With too much printed money in circulation, the value of the German Mark fell. As a result, prices of goods soared. The image of Germans carrying cartloads of currency notes to buy a loaf of bread was widely publicised. This crisis came to be known as hyperinflation.
How did the stock market crash affect Germany?
The crash had an immediate effect in Germany as American investors, anxious about their financial position, began withdrawing their loans to Germany. German indebtedness to these investors had by 1929 reached nearly 15 billion marks.
What was the Great Depression?
The Great Depression was a long and extensive economic crisis, affecting most developed nations in the early and mid-1930s. The Great Depression was particularly severe in Germany, which had enjoyed five years of artificial prosperity, propped up by American loans and goodwill. Unemployment hit millions of Germans, ...
What happened to German manufacturing in 1932?
German manufacturers consequently endured a sharp downturn in export sales. Many factories and industries either closed or downsized dramatically. By 1932, German industrial production had fallen to just 58 per cent of its 1928 levels.
How many seats did the Nazis win in 1932?
In the July 1932 elections, the Nazis won 230 seats – by far the highest number held by one party in the Reichstag at any point during the Weimar period: General election. NSDAP votes.
How many Germans were out of work in 1933?
4. By 1933 more than 6 million Germans were out of work, while many families struggled to afford food.
What was the German industrialists' prosperity in the 1920s?
German industrialists enjoyed prosperous times in the second half of the 1920s, thanks to foreign investment. But by the early 1930s, there was little demand for their products while capital and credit were almost impossible to obtain.
What was the most visible outcome of the Depression?
The most visible outcome of the Depression was mass unemployment. By 1932, more than 12 million Americans or 24 per cent of workers were out of a job. The collapse in economic confidence also led to runs on banks, as people rushed to withdraw cash. Hundreds of banks closed and many people lost their savings and pensions.
How did the Wall Street crash affect the economy?
The economic and social effects of the Wall Street crash were disastrous. Between 1929 and 1932 , American industrial production fell by 45 per cent. Many companies were bankrupted or ceased trading; those that stayed in business released workers to cut costs.
What were the causes of Germany's economic collapse?
Another devastating factor contributing to Germany's economic collapse was the international trade war triggered by the passage of the Smoot-Hawley Tariff Act in the United States in 1930. This provision effectively prevented many German industries from selling their goods in foreign markets.
What did the destruction of the German currency mean?
The destruction of the currency wiped out the people's savings, which meant that there would be very little capital available within the German economy for years to come. No other World War I combatant nation so destroyed its currency. This factor alone would have produced a depression for Germany.
Why did Germany print paper marks?
In order to pay its debts for World War I, as dictated by the Versailles Treaty, Germany engaged in a tremendous hyperinflation of its currency, printing paper marks until, by 1923, they became utterly worthless.
What was the burden of reparations payments required of Germany?
Germany reeled from the huge burden of reparations payments required of it as a condition of the treaty. Payments made by Germany to the victorious Allies represented a drain of capital that would have otherwise been directed toward the growth of German industry.
Was Germany hit by the Great Depression?
Germany was, indeed, especially hard-hit by the Great Depression. A major factor was the Treaty of Versailles, which was supposed to settle outstanding disputes following the cessation of hostilities in World War I. Instead, the Allies allowed their desire for revenge to get the better of them, and historians are nearly unanimous in their judgment ...
How did the Great Depression affect the economy?
The Great Depression also played a crucial role in the development of macroeconomic policies intended to temper economic downturns and upturns. The central role of reduced spending and monetary contraction in the Depression led British economist John Maynard Keynes to develop the ideas in his General Theory of Employment, Interest, and Money (1936). Keynes’s theory suggested that increases in government spending, tax cuts, and monetary expansion could be used to counteract depressions. This insight, combined with a growing consensus that government should try to stabilize employment, has led to much more activist policy since the 1930s. Legislatures and central banks throughout the world now routinely attempt to prevent or moderate recessions. Whether such a change would have occurred without the Depression is again a largely unanswerable question.
What was the most devastating effect of the Great Depression?
The most devastating impact of the Great Depression was human suffering. In a short period of time, world output and standards of living dropped precipitously. As much as one-fourth of the labour force in industrialized countries was unable to find work in the early 1930s. While conditions began to improve by the mid-1930s, ...
What was the worst drought in the 1930s?
Bank panics destroyed faith in the economic system, and joblessness limited faith in the future. The worst drought in modern American history struck the Great Plains in 1934.
Why were Americans absorbed by the Great Depression?
Americans were absorbed by their “Great Depression” because they had never before encountered such a widespread economic failure. This is why they, unlike their foreign counterparts, did not even begin to think about the approach of war or the dangers of totalitarianism until the end of the 1930s.
What were the traumas of the 1930s?
For people in the United States, the 1930s was indelibly the age of the Great Depression. Bank panics destroyed faith in ...
What was the role of the government in the 1930s?
In many countries, government regulation of the economy, especially of financial markets, increased substantially in the 1930s. The United States, for example, established the Securities and Exchange Commission (SEC) in 1934 to regulate new stock issues and stock market trading practices.
What was the Social Security Act of 1935?
The United States also established unemployment compensation and old-age and survivors’ insurance through the Social Security Act (1935), which was passed in response to the hardships of the 1930s. It is uncertain whether these changes would have eventually occurred in the United States without the Great Depression.
What was the impact of the Great Depression?
Any analysis of the Great Depression must start with World War I. This conflict had a dramatic economic impact, which went far beyond the massive military casualties. It embraced non-belligerents as well as those directly involved in the conflict. The war encouraged but also grossly distorted economic effort.
When did Germany's economy reach its peak?
For example, in Germany the economy had reached a peak in 1927 and had already begun to contract when the supply of U.S. capital, on which rising German living standards relied, became less certain. All countries trying to attract international capital had to reject economic plans that would cause a budget deficit.
How many countries adopted the gold standard in 1931?
In 1931, forty-seven countries embraced the gold standard. By late 1933 only a small rump comprising, principally, Belgium, France, the Netherlands and Switzerland still clung to the old orthodoxy. To remain competitive the "gold bloc" nations had to resort to savage deflation, which imposed serious social costs on their populations. As their economies declined their currencies came under severe speculative pressure, to which the orthodox solution was even more deflation and protection. However, raising tariff barriers was not a solution since countries that had already devalued their currencies also used tariffs as a retaliatory device.
How did the Fed help the stock market?
In early 1928 the Fed moved to curb growing stock market speculation by introducing a tight money policy. As interest rates rose, Fed officials believed that borrowing for speculative purposes would become too expensive and the furious buying would fade away. This strategy was a complete failure. It did, however, have serious repercussions for international lending because it altered the relationship between U.S. interest rates and those in the rest of the world. Since 1924 the Fed had kept rates low in order to encourage U.S. money to flow overseas, and many economies had become highly dependent on the continuation of the flow. However, borrowers began to see that much of the international capital was short term and highly volatile. Indeed the term "hot money" had been coined to describe its chief characteristic. Responding to higher interest rates, U.S. savers decided that the domestic opportunities had become so attractive that money which previously would have been sent overseas remained at home. But the United States was the world's leading international investor during the 1920s, with central Europe and Latin America being especially favored. How could international borrowers entice Americans to send more capital to them?
Why did the gold standard deflate?
The wrong rate would lead to formidable problems if it proved difficult to defend during an economic crisis, as devaluation was not an option. Gold standard countries that came under pressure had to deflate in order to make their exports more competitive through cost reductions, which inevitably caused rising unemployment and wage cuts.
Why did the British and French run up a war debt bill?
The British and the French did not worry unduly as they ran up a large war debt bill because they assumed that a vanquished Germany would meet the costs of the war. In 1921 a reparations total was agreed upon by the non-U.S. allies and imposed upon Germany. The Germans viewed the reparations bill as outrageous and the sum far too large for them to pay. The victors were convinced that Germany could pay if its exports were competitive and the foreign currency they earned was transferred to the Allies. However, the prospect of maintaining a low-wage, high-tax economy for many decades after the hardships of war and postwar turmoil had no appeal to Germans.
What was the role of the United States in the 1920s?
During the 1920s the United States assumed the role of leading international lender .
Background
The Wall Street Crash
The Impact on Germany
- This collapse had profound effects on American society but the impact on Weimar Germany was worse, and for different reasons. Germans were not so much reliant on production or exports as they were on American loans, which had propped up the Weimar economy since 1924. These loans ceased in late 1929, while many American financiers began to ‘call in’ outstanding foreign l…
Effects on Industry
- German industrialists enjoyed prosperous times in the second half of the 1920s, thanks to foreign investment. But by the early 1930s, there was little demand for their products while capital and credit were almost impossible to obtain. To compound the problem, the United States, at that point the largest purchaser of German industrial exports, put up tariff barriers to protect its own …
Mass Unemployment
- The effect of this decline was spiralling unemployment. By the end of 1929, around 1.5 million Germans were without a job. Within a year this figure had more than doubled and by early 1933, a staggering 6 million people (26 per cent of the workforce) were out of a job. This unemployment had a withering impact on German society. There were few short...
Government Failures
- The Weimar government failed to respond effectively to the crisis. Rather than attempting to stimulate the economy through welfare and spending, as governments usually do in a recession or depression, Weimar leaders took the opposite path. Heinrich Bruning, who became chancellor in March 1930, feared inflation and budget deficits more than unemployment. Rather than spend…
The Nazis Benefit
- The real beneficiary of the Depression and Bruning’s disastrous policy response were political extremists like Adolf Hitler and the National Socialist (NSDAP) party. With public discontent with the Weimar government soaring, membership of Hitler’s party increased to record levels. The Nazi leader found the situation to his liking: “Never in my life have I been so well disposed and inwardl…