Monday, September 12, 2016

How Germany was affected by Great Economic Depression of 1929

In 1929, the United States stock market collapsed marking the beginning of a widespread economic crisis which deeply impacted US and Europe. The effects on Germany was huge 

1) Germans had to pay heavy war reparations post Treaty Of Versailles and were finding it immensely difficult to do so. The US consequently prepared the Dawes Plan to help Germany tide over the crisis. This helped Germany in recovering to some extent from the economic abyss it found itself in. However, following the Great Economic Depression, the Dawes Plan was withdrawn, plunging Germany into economic crisis 

2) Industrial production fell down post the Great Depression. By 1932, industrial production had reached 40% of 1929 levels. Workers lost their jobs or faced substantial salary cuts. The number of unemployed touched unprecedented level. German Reich on account of galloping Inflation lost its value eroding the savings of middle class. The society was filled with fear of proletarianisation. The economic crisis spilled over onto other fields as well 

3) Hitler started selling dreams to the German public when he promised to revive the economy and restore Germany to its former greatness. In the elections of 1931, no one political party could secure complete majority. However the prevailing economic and political crisis created panic amongst the capitalist class over the rise of Communism and they threw their weight behind Hitler who was only 38 seats short of majority. Due to this, Hindenburg was forced to accept Hitler as German Chancellor in 1933. This led to the beginning of Nazism 

4) A lot of support for Hitler’s policies, particularly amongst the middle class was due to their experience post the Economic Depression 

Thus the economic depression had far reaching impact on Germany.

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