The Great Depression has been regarded as the event that prevented a fully post-war European recovery. Despite the improvements during the “Golden Years” after the war the effects of the economic crisis led to an uncontainable course that led to the impoverishment of society and the radicalization of political ideologies. TheDepression is the background for social and political dramatic transformations: fall of the Weimar Republic, the consequent the rise of Nazism and its effect.
On the 24th of October, 1929 the world economy ceased to be what had been when the American stock market collapsed in Wall Street. Since the end of the Great War, the US had positioned them to be the world’s creditor and as soon as Americaneconomy collapsed and the loans given were called back, the economy worldwide collapsed too, as the economist J.M Keynes wrote: “When America sneezed, the rest of the world caught a cold”. The banks in the US lost all their money and people took their savings out, therefore inversions in industry and agriculture were insufficient and thus unemployment rose, this pattern was to follow in many othercountries, specially Europe were no part was left untouched. By 1932 European countries aimed to protect their national interest at all costs, to prevent foreign imports damaging national industry and agriculture strict trading systems were approved. This led too, to disturbances in the relationships between countries. The impact of the Wall Street Crash affected the economy worldwide, but struckthe German economy particularly hard.
Even during the “Golden Years” Stresemann had warned about the fragility of the economy and the strong dependency from US loans. Not even a month after his death the stock market collapsed in the US and as he had anticipated “a large section” of the economy collapsed as Germany was “dancing on a volcano”. The economic effects were vast, in a country which wasnot fully recovered still from the effects of the war, the Treaty of Versailles and hyperinflation in the early 1920s. Foreign capital was around 5 billion marks by 1925, in the year of the Crash it decreased by half and by 1930 it had fallen to 700 million marks. Between 1929 and 1932 German exports fell from £630million to £280million. The widespread effect affected farmers that had alreadybeen hit by high interests and the fall of their prices and by 1932, 18 000 farmers had gone bankrupt. In Germany 50 000 industries went bankrupt by 1932 and in 1931 five of the German major banks were closed down. This period shows the lowest economic results ever.
Yet the first noticeable effect was the massive amount of unemployment. In the 1928 winter 1.5 million Germans had no work, the numberincreased to 3 million at the start of 1930 and by the end of the same year the figures reached 5 million. Registered unemployment eventually reached 6 million. At one point one in every 3 Germans was unemployed, Germany could no longer appeal to the US or Europe for economic assistance, many Germans had seen their savings turn into worthless paper as a result of hyperinflation before andcitizens suffered psychologically too, those who had a job lived with the constant insecurity. Families found themselves in the streets, and desperation grew. German Chancellor Von Papen speaking in 1932 referred the “abyss between the glowing optimism of those days and the pessimism and despair of today!!” he said this in the Lausanne Conference, where the reparation terms of the Treaty of Versailleswere further reduced. Von Papen was chancellor at the time and he was addressing the former war-enemies, so he would be trying to create a negative image of Germany at the time so reparations could be reduced, but still there is evidence that proves the state of despair. In the same speech he said that the crisis had “shaken the confidence of the masses” which proved right when the Weimar...