Rise of the Nazis2. Economic Problems of

the Weimar Republic

Higher History

What 3 fundamental things do a Government have to do?

• Protect Country

• Ensure law and order

• Regulate taxes and money

• X – Treaty of Versailles

• X – Revolutions

• X – Hyper-inflation

We will study the economy in 4 distinct phases:

• 1919-1922 – economic problems and recovery after WW1.

• 1923-1924 – Hyper-inflation/Beerhall Putsch, chaos in Germany.

• 1925- 1929- The Golden Age of Weimar, prosperity and the fall in support for extremists like Nazis.

• 1929-1933 – High point of the Great Depression and huge increase in Nazi support.

• 1914 – Germany was the richest country in Europe.

• By 1918 – Germany was in poverty - £8 billion spent on war was lost.

• Fined £6.6 billion by Versailles’ reparations.

• The severe economic problems of the new republic were a key factor in its downfall. The famous historian AJP Taylor states that it was the most important reason in the Nazi seizure of power in his famous quote:“Only the Great Depression put the wind in the Nazi sails”

1919-1922

• Economic problems and recovery after WW1.

• After recovering from WW1 – e.g. war damage, starvation, reparations – the German economy began to get back on its feet. Politically things began to calm down as prosperity was returning.

1923-1924

• Hyper-inflation/Beerhall Putsch

• In 1922, Germany fell behind with its reparations payments.

• In 1923, French and Belgian troops occupied the industrial Ruhr. Trade slumped.

• The economy collapsed with hyperinflation. The German mark was worthless.

• The government printed more money and paid its debts with worthless money.

• Businessmen went bankrupt. Workers were badly hit as unemployment soared.

• Middle class savings were wiped out. 20 years savings were worth less than a box of matches by 1923.

• Living standards fell as prices of food, clothing and fuel rose higher than wages e.g.a Kolbi cabbage cost 50 million marks.

• There were food riots.

Beer Hall Putsch 1923

• Due to the hyper-inflation sweeping Germany and the obvious discontent of the people, Hitler felt confident enough to try to takeover the government and city of Munich in Bavaria. The actual putsch/revolution was a disaster but it is important as the first example of how economic factors directly helped the Nazis.

Analysis• In bad economic times the Nazis would gain

a lot of support.• Hyper-inflation = Nazis feel stronger + gain

support.• The actual putsch/revolution was a disaster

but it is important as the first example of how economic factors directly helped the Nazis – it showed they felt they had enough supporters to attempt a revolution.

• Even though the putsch failed the publicity from Hitler’s trial resulted in 1,900,000 (1.9 million) votes for the Nazis in the first election of 1924.So clearly Hyper – inflation helped the Nazis

The Golden Age:1925-1929

• The Golden Age of Weimar = prosperity and the fall in support for extremists like Nazis.

• The 1924 Dawes Plan (borrowed 159 billion marks in gold from the USA) arranged for reduced reparations and American loans. Industry and trade recovered.

• A new, stable Rentenmark replaced the old worthless currency.

• Unemployment fell. The country enjoyed a period of prosperity.

Analysis

• Prosperity meant increased employment and wages and made democracy more popular.

• Germans were no longer desperate enough to listen to Hitler’s wild promises and this resulted in less people voting for the Nazi Party – in the 1928 election votes for the Nazi Party fell to 800,000.

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The Great Depression 1929-1933

• The Great Depression saw a huge increase in Nazi support.

• When the Wall Street Crash occurred in October 1929, its effect on Weimar was catastrophic.

• In a panic, the USA recalled all its foreign loans, Germany which had borrowed most (Dawes Plan – borrowed 159 billion marks) suffered the most.

The Effects of the Great Depression• The Weimar economy collapsed. By 1930

unemployment was at 3 million, by 1932 it was 6 million (highest in Europe).

• Different coalition governments tried different methods to fight the Depression – e.g. as taxes were cut the Weimar government had less money to spend so they cut government wages or benefits like pensions or unemployment benefit.

• Middle class people working as civil servants, in banks or in industry saw their wages cut or even being made unemployed. It seemed like 1923 all over again.

Analysis• As the Unemployment got worse e.g. 1930 - 3 million 1932 - 6 million the misery increased e.g. wage cut, benefits cut etc, desperate

people turned away from the democratic parties to extremists like the Nazis and KPD.

• As the Depression got worse the Nazi vote rose as did the vote for the other main extremist party the communists KPD. At the same time the vote for democratic parties like the SPD or DDP collapsed, clearly the German people had lost faith in democracy.

• At the same time many Middle Class people were frightened as they saw that the KPD was getting stronger and they feared another Spartacist Revolt like 1919 and a Russian style communist dictatorship.

• Weimar governments seemed weak and incapable of solving the economic problems or stopping the communists and so many Germans began to look for a strong man with a clear vision to lead them out of danger – ADOLF HITLER.

Votes for the Nazi Party

• May 1924 – 1,918,300• December 1924 – 907,300• 1928 – 810,100• 1930 – 6,409,600• July 1932 – 13,745,800• November 1932 – 11,737,000• March 1933 – 17,277,000

The Depression’s Effect on Votes for

Extremist Parties • 1930• Unemployment =

3 million• Nazi vote =

6.7 million• KPD vote =

4.6 million• DDP (Liberals) vote

= 1.3 million

• 1932• Unemployment =

6 million• Nazi vote =

13.7 million• KPD vote =

5.3 million• DDP (Liberals) vote

= 400,000

What conclusion can we draw from these figures?

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