In 1929, the USA had suffered from a Great Depression. People lost their money, businesses went bankrupt leading to a soar in unemployment numbers and homes were lost resulting in the rapid increase in slums. After the First World War, Germany begun to borrow money from the USA to help their country recover. Due to the Depression having a big effect on the USA's economy, Germany was no longer supplied with the money they needed to recover. In 1933, Hitler became Chancellor of Germany.
‘The Wall Street Crash was the main reason Hitler got into power’. Do you agree? When the Wall Street stock market crashed in 1929 America’s economy was plunged into a depression. This had a big impact on Germany’s economy, as they relied on the loans from America, and was a big reason in the Nazis coming to power. However there were many other factors that contributed towards the Nazis rising to power, for example Propaganda, the weakness of the opposition and the role of Hitler.
The new German Republic faced a large number of political, economic and physical problems at the end of World War I. Having lost World War I they had taken a huge beating, taking huge numbers of casualties and their leader, Kaiser Wilhelm, being forced to abdicate. However I believe that the most serious problem they were facing was bankruptcy due to their ruined economy. Before the war, Germany had been very industrial and powerful, having the third most powerful economy in the world, behind Britain and USA. However after the war their economy had been ruined and there was very little money in he system, leaving them almost as a third world country.
Because of this inability to repay, businesses started to close down because the loans were rapid and little trade was taking place. No one had the money to buy from businesses or factories so they were forced to close. Unemployment became a missive issue - by 1932, 6 million people were unemployed. Millions of Germans became homeless because they couldn’t afford to pay rent or housing bills. Many people felt extremely let down by the Weimar Government because they felt it wasn’t doing anything to help or support them, so they began to turn to extremist parties like the communists and the Nazis.
By 1933 over 6 million German workers were unemployed. It was not necessarily the unemployed who formed the bedrock of growing Nazi support but those who believed that without political change that they too might well suffer collapse in living standards: the Mittelstand (lower middle class) felt they were threatened with worsening economic conditions. This economic crises was sufficient to persuade a number of Germans to break with their voting habit of the past and vote
The Wall Street Crash in 1929 was important in getting the Nazi’s into power because the crisis was catastrophic in Germany as it caused unemployment to increase to 3 million. Nearly everyone was affected by the unemployment. Since most of the unemployed were men, they could see no way to provide for their families. As the German democratic government was beginning to unravel as they were struggling to control the economy. This made people give up hope on the democracy as it was not working and caused people to resort to extremist groups which made the Nazis seem like they were the solution to the problem.
The worst affected groups were farmers, farm labourers, workers in old industries, Black Americans and new immigrants. Also in many industries wages were low because the bosses opposed trade unions and resisted increases in pay to maximise profits. This added to the unequal distribution of wealth which in the long run decreased demand for products and so was therefore a long term cause of the depression. The next factor, Tariff policies, led to the rise of the country however they were exploited and ultimately led to the economic downfall of America. Tarriffs such as the Fordney Mcumber Tariff restricted imports on foreign goods to protect domestic industries from competition.
Hyperinflation happened because Germany owed so much money due to reparations of the war, it simply thought that it would just be able to print more money, but when a government prints money that it does not have the value of money decreases and prices go up. In Germany this was a huge problem as inflation was rising at astonishing rates and the effects were disastrous. Many people that had worked hard are there lives were forced to become beggars as the pensions and savings lost all value. The people that had jobs were still in disastrous positions, as their wages could not keep up with the increasing rate of inflation. People were not blaming the Kaisers war government but instead they were blaming the Weimar government, as they were the ones that had agreed to pay the war reparations in the treaty of Versailles.
As prices were driven down to the lowest point to create sales, this caused problems for the economy. It was extremely low. If they couldn’t create sales, they were forced to shut down close business. Factories closed and workers were laid off, meaning no money was coming into workers or big businesses. Unemployment percentages were at an extreme high and this failure to regulate money throughout the economy drove down the economy.
The value of taxes on items also decreased. Revenues gained from new development were also decreased, leading to the unemployment rate. Although the 2007-2009 recessions had many hardships the economy will recover. The unemployed workers still feel the effects of this recession. It was devastating and painful to them and their families.