Germany and the Great Depression

How did the depression in Germany (1929-1933) affect different social groups?

The great depression, a huge economic slump caused by a crash in the American stock market, had a global effect on a large number of countries, especially those who manufactured food and raw materials.1 Germany was in a particularly bad place financially after world war one and had been borrowing a large amount of capitol from the US to repay their allies and when the stock market crashed they were unable to continue doing so and were required to begin repaying their debts. 2 Unfortunately Germany’s government had come to rely on these loans from the US and therefore had to change what money was being invested in which caused the German government a lot of tension. There was also the dramatic occurrence known as a banking crisis where several important banks including the National Bank had to close their doors and state that Germany’s entire financial system needed to be reconstructed from scratch with assistance by the government.3 These occurrences not only created horrible results for Germany’s economy, they had an overall affect on the German people in many different social groups. “The worldwide economic crisis, which followed upon four terrible years of war and the hyperinflation of the 1920s, had a profound effect on Germany’s social fabric.”4 It is possible to see within Germany’s class system that the depression had a somewhat negative effect on all levels of class. The great depression not only affected Germany’s working class, with high unemployment rates resulting from it; it also caused problems for the upper class, middle class, landowners and farmers. This lead to a large amount of political uncertainty and can even be suggested was one of the reasons for the rise of the communist party.

During the war the working class made up the largest percentage of Germany’s population at around 70 percent.5 Unfortunately this couldn’t last and in 1929 Germany’s unemployment rate had increased by an average of 35 percent from the previous year.6 Germany had the highest unemployment rate of all the affected countries, even higher than the US.7 It was suggested to overcome the crisis that workers should work an extra two hours per day for the next ten years with no extra pay, this created a large amount of tension between the government and the workers.8 While citizens had hoped their standards of living would improve at the end of the war, inflation meant this wasn’t going to happen. Standards of living became much worse due to the mass unemployment. Most families had to rely on government payments and food rations to support themselves. It is no wonder that the German working class citizens were unhappy with the government when “persistent severe depression and accompanying mass unemployment can cause great social distress, lead to public disorder and an escalating discontent with the established order.”9 For those who could keep their jobs, there were still large differences in wages both between the level of skills workers had, and of course the difference between men and women. A skilled worker for example would earn thirty six percent more than an unskilled worker in the same company, a miner with qualifications would earn forty six percent more than his assistant. 10These wages unfortunately were still not enough for people to provide for their families. Women earned around half of what a man in the same role would have earned. This meant that they were less likely to be unemployed as they could be expected to perform the same jobs as men at a far lower cost. However some families were lucky enough to take in a dual income with both parents being employed, this caused a lost of anger with the unemployed who were unable to provide for their families at all.

Horsfall Carter wrote in 1932 that the registered unemployment rate was over six million people, and around forty percent of these held trade union memberships.11 Trade unions were very important in helping keep the working class moral high and ensuring that fair shares of gross domestic product went into wages, and while successful in doing so, they were often blamed for putting stress on the economy. After the war, the working class were divided politically, with two thirds of the followers of the Independent Social Democratic Party of Germany (USPD) moving their support to the communists. “The working class was now split in two. One half supported the republic and a pragmatic policy of social reform; the other struggled to replace it by a Soviet-style dictatorship.”12 It’s no wonder that the Nazi’s political campaign had a focus on putting Germans back in work and won over a large amount of loyalty from the working class.

After the war, it was believed that the structure society had not changed too much for the bourgeois,13 who only made up a very small part of Germany’s population, under one fifth of it.14 Generally the middle class included a diverse mix of artisans, shopkeepers, small businesses and service industry workers. It also included what is known as white-collar workers for example craftsmen, technicians, clerks and schoolteachers. Of all theses different groups, people who relied on their craft suffered most.15 We can blame the transformation of commerce and industrial concentration that lead to many craftsman’s workshops and small stores closing,16 or becoming repair shops.17 Many middle class families had already lost their savings during the time of inflation and had their self sufficient economy threatened.18

By looking at the Reichstag elections in September 1930 we can see that a large portion of the voting population sided with the Nazi party at eighteen point two percent of the vote, opposed to the previous year where they only held two point six percent of the vote. The middle class voters felt that their social and economic existences were threatened and that Hitler’s parties offered more for their interests.19 The middle class population however did not act as a whole politically, with Catholics continuing to support the center party and many people believing that the Nazis’ policies were uncertain. Hitler’s tactic against department stores had many small business owners’ votes.20

Even the upper classes of German society were affected somewhat by the depression. The depression lead to the end of aristocracy playing a dominant role in Germany as they lost political, legal and economic power in the new industrialised society. Many viewed the depression as a time of unfamiliar uncertainty; most people were opposed to political change. This was however exactly what happened as people’s faith in political democracy began to decline. After the war, upper class or aristocrat families were compensated for the libraries, castles, parks and other important properties to be taken from them with the intention of public use.21

Young people were affected highly by the depression and unemployment, with very little positive outcomes for school leavers. Most were unable to find any hope of a job or the ability to acquire skills or enter apprenticeships. Even those who had graduated university were still not able to find jobs and people lost faith in the value of education. 22 This lead many university students to align with the National Socialist Students Association, even before the Nazis were at large they offered university students the best means of becoming successful. 23 Hitler’s propaganda appeared as an attractive prospect for Germany’s youth due to its policies aimed at the future and what a dire situation they would be in without them. Young people believed the current political situation to be unappealing and the Nazi’s policies fascinated them with ideas of revolution.24

Owners of land were also affected by the depression. Agricultural developments due to the war created serious problems for Germany economically due to international price levels dropping but Germany’s production costs staying high.25 Farmers were reluctant to adjust to this and continued to produce high amounts of grains (wheat and rye) even though prices had fallen by around 70 percent.26 Even those farmers who were able to adjust to Germany’s market needs, such as those who farmed livestock or produced dairy, still had to rely on the population of the cities to require their products, and when the depression hit in 1929 even this would not help them financially as people simply could not afford to purchase their products which became luxury items.27 Germany was becoming a more industrialised society and farmers were unwilling to adapt to this. 28 While the hyperinflation that occurred before the depression helped to rid them of their debts, they ended up paying higher taxes, higher interest on bridging loans29 and were faced with the problem of high competition from other counties.30 “The ups and downs of the markets, both international and national, created booms and busts that ruined many farmers and peasants, and forced many to surrender their lands and become labourers and debt peons.”31 The drop in agricultural employment resulted in a huge decrease in the class of independent peasants because these people largely relied on independent smallholdings.32 Due to this, the income of farmers sank largely while debt increased so fast that often it came to landowners having to sell their farms out of bankruptcy. According to Petzina, “in 1931 alone an area of 177,000 hectares was under compulsory sale.”33 The result of this in many cases became unemployment, as finding jobs was unlikely.

Politically, the agricultural aspect of German society had a very dominant role in certain areas during the depression. For example, the owners of land in the “rye belt, in the east of the Reich”34 who were heavily influenced by Prussian Junkers,35 believed that any “far-reaching economic measures”36 that would work against them, would have become a threat to republican regime, which lead these land owners to believe that any attempt to solve the economic crisis was a “question of the survival of democracy”.37 A group known as the National Christian Farmers and Rural Population Party (CNBL) went their own way, away from nationalist and conservative parties to assist land owners in their struggles by organising large rallies for farmers, stopping the government from seizing farms that had gone bankrupt and even joined forces with an extremist organisaton consul to begin a campaign of terrorism.38 Unfortunately for landowners, these and any other rural protest campaigns did not have the stamina to continue which lead to a large amount of rural areas filled politically by Nazi parties, winning voters over with campaigns aimed specifically at the agricultural class.39

The depression proved to be an indication for the communists that capitalism had flaws, and they used this to gain support and eventually destroy social democracy. Instead of trying to overcome these flaws to improved democracy, a majority of Germany fell to Hitler’s promises that he would fix all conflicts between classes and create a harmonious society.40 The great depression in Germany had a strong effect on not only the world’s political scene but on the different power relationships within society, on the different behaviours of individuals and on government policies. In Germany the political situation was influenced by two things, the rapid growth of the right wing anti-democratic forces and the decline of the democratic parliamentary system. This was made possible when millions of impoverished people gave up on democracy and moved to follow the Nazi’s.41

The great depression had an effect on multiple social groups in Germany, not even the very wealthy or aristocracy came out unscathed. The working class suffered the most with unemployment rates soaring in some cases families living in extreme poverty. While they thought the standards of living would rise after the war, Germany was highly affected by the economic crisis. The working class were then divided over their votes as many previous believers in democracy changed their votes towards communism as their campaign promises seemed more effective in getting them a better life and saving Germany’s economy. From the middle class, it was the people who relied on trade and craft who suffered the most financially, with many going bankrupt and being forced to close or become repair shops. As many of the middle class had lost their savings prior to the depression during the years of Germany’s hyperinflation, they too had their self sufficiency and economy threatened. While they were still as politically divided as the working class, this threat of no future led many to change their votes to support the Nazi’s. Even the aristocracy didn’t go through the depression unscathed. Most lost all their power, politically and economically and were forced to give up land and important properties for public use, with little compensation. Even young people were affected with very negative outcomes for school leavers, due to the level of unemployment, even apprenticeships were scarcely available. Even those who had graduated from higher education struggled to find themselves jobs, which lead university students to doubt the current politicians and lead most of them toward Hitler’s revolutionary policies. Even the agricultural classes were affected by the depression with the price and demand for things like rye dropping by large amounts. Many farmers couldn’t adjust to these conditions, this often resulted in them having to sell their land and become peasants. While these farmers had support politically to begin with, most found themselves siding with the communist parties when this support ran out. Overall, the great depression had negative effects on all of Germany’s social classes and created a large amount of unemployment and poverty. It also caused a large amount of political uncertainty in many classes who previously had iron clad political opinions and votes. Many people changed their votes to the Nazi’s who’s political propaganda promised a better Germany, naturally the general outcome of this lead to the rise of the communist party and Hitler’s reign, which is why it can be argued that the great depression was one of the reasons to blame for Hitler’s rise to power.

Bibliography:

Primary Sources:

W. Horsfall Carter “Germany Struggling To Her Feet” in Fortnightly Review 131 (1932).

Secondary Sources:

Crafts, Nicholas, and Fearon, Peter. “Depression and Recovery in the 1930s: An Overview,” in The Great Depression of the 1930s: Lessons for Today, 1 (Oxford: Oxford University Press, 2013).

James, Harold. “Monetary Policy and Banking Instability” in The End of Globalization: Lessons from the Great Depression, (Cambridge: Harvard University Press, 2002).

Kitchen, Martin. “The Weimar Republic: 1919-1933” in A History of Modern Germany, (Oxford: Wiley-Blackwell).

Petzina, Dieter. “Germany and the Great Depression” in Journal of Contemportary History, 4:59, (1969), http://jch.sagepub.com/content/4/4/59.citation.

Tauger, Mark, B. “The Failed Restoration of the 1920s and the Great Depression of the 1930s” in Agriculture in World History, (Online: Taylor & Francis, 2010), http://reader.eblib.com.au.ezproxy.library.uq.edu.au/(S(bojn3zy3khxgskvc2b0uv1ez))/Reader.aspx?p=667842&o=86&u=Qox2kvffh6M0szVrIMm4cvh76DYtGzr%2f&t=1399959956&h=781B043764CD32D6CA0899073D2CCB22606AAAEA&s=12811759&ut=213&pg=1&r=img&c=-1&pat=n&cms=-1#.

Tomka, Bela. “Social Classes and Strata: Expanding Centre and Fading Contours” in A Social History of Twentieth-Century Europe (Online: Taylor & Francis, 2013), http://reader.eblib.com.au.ezproxy.library.uq.edu.au/(S(fwkc1rse35x5iiqqugd4z3ag))/Reader.aspx?p=1154315&o=86&u=Qox2kvffh6M0szVrIMm4cvh76DYtGzr%2f&t=1400129080&h=92BB318AD301E2F9AE0C0C4A82DCA546DE8262C1&s=12855360&ut=213&pg=1&r=img&c=-1&pat=n&cms=-1#.

Bibliography: Primary Sources: W. Horsfall Carter “Germany Struggling To Her Feet” in Fortnightly Review 131 (1932). Secondary Sources: Crafts, Nicholas, and Fearon, Peter. “Depression and Recovery in the 1930s: An Overview,” in The Great Depression of the 1930s: Lessons for Today, 1 (Oxford: Oxford University Press, 2013). James, Harold. “Monetary Policy and Banking Instability” in The End of Globalization: Lessons from the Great Depression, (Cambridge: Harvard University Press, 2002). Kitchen, Martin. “The Weimar Republic: 1919-1933” in A History of Modern Germany, (Oxford: Wiley-Blackwell). Petzina, Dieter. “Germany and the Great Depression” in Journal of Contemportary History, 4:59, (1969), http://jch.sagepub.com/content/4/4/59.citation. Tauger, Mark, B. “The Failed Restoration of the 1920s and the Great Depression of the 1930s” in Agriculture in World History, (Online: Taylor & Francis, 2010), http://reader.eblib.com.au.ezproxy.library.uq.edu.au/(S(bojn3zy3khxgskvc2b0uv1ez))/Reader.aspx?p=667842&o=86&u=Qox2kvffh6M0szVrIMm4cvh76DYtGzr%2f&t=1399959956&h=781B043764CD32D6CA0899073D2CCB22606AAAEA&s=12811759&ut=213&pg=1&r=img&c=-1&pat=n&cms=-1#. Tomka, Bela. “Social Classes and Strata: Expanding Centre and Fading Contours” in A Social History of Twentieth-Century Europe (Online: Taylor & Francis, 2013), http://reader.eblib.com.au.ezproxy.library.uq.edu.au/(S(fwkc1rse35x5iiqqugd4z3ag))/Reader.aspx?p=1154315&o=86&u=Qox2kvffh6M0szVrIMm4cvh76DYtGzr%2f&t=1400129080&h=92BB318AD301E2F9AE0C0C4A82DCA546DE8262C1&s=12855360&ut=213&pg=1&r=img&c=-1&pat=n&cms=-1#.