THE GREAT DEPRESSION IN EUROPEGeoffBruno

CHAPTER27

TOWARD THE GREAT DEPRESSION

• Three Factors– The Financial Tailspin

• Inflation after WWI• French desperately sought reparations (esp. from

Germany)– Invaded the Ruhr river valley

• Many nations owed large sums to the U.S• United States invested in European countries until the

stock market crashed in October 1929– Less credit flowing into Europe– Bank failures worldwide

• Herbert Hoover declared a stop to reparations during the financial crisis

• Debts to most nations were eventually settled

TOWARD THE GREAT DEPRESSION

• Three Factors– Problems in Agricultural Commodities

• Less demand for agricultural goods– Despite greater production due to new machinery– Fewer jobs available

• Greater worldwide production > lower prices• Higher industrial wages > higher prices for agricultural

machinery– farmers were unable to pay for new machinery to produce

goods that they would be paid less for• Especially prevalent in Eastern Europe• Caused depression for other European industries

– Unemployment spread and grew despite government stimulus

TOWARD THE GREAT DEPRESSION

• Three Factors– New Government Policy

• Most economic theory called for government spending cuts

• However, governments eventually began a movement of mass economic intervention– Caused by the harsh severity of the crisis– Pressured to do so by new mass electorates

• Instituted new regulations on private enterprises– Trade, labor, and currency regulations became popular– Attempted to increase employment and industry growth

• State intervention was grater in Eastern Europe

THE GREAT DEPRESSION IN THE DEMOCRACIES

• Great Britain– Ramsay MacDonald controlled the British Labour

Government in 1929• The Ministry was divided as to how to tackle the economic

downturn• MacDonald sought to reduce spending, gov’t salaries, and

unemployment benefits• The Cabinet resisted punishing the unemployed• MacDonald resisted radical legislature to gain respectability for

his institution – The Prime Minster requested that all members resign

• MacDonald remained in office and organized a coalition ministry called the National Government, made up of the Labour, Conservative, and Liberal parties

THE GREAT DEPRESSION IN THE DEMOCRACIES

• Great Britain– The National Government’s plan to attack the

depression composed of three parts• Balance the national budget

– Raise taxes– Cut unemployment benefits– Lower government salaries

• Abandoned the Gold Standard for British currency– Value of the Pound dropped significantly– Increased exports because British products were now

more affordable in foreign markets

THE GREAT DEPRESSION IN THE DEMOCRACIES

• Great Britain– The National Government’s plan to attack the

depression composed of three parts• The Import Duties Bill

– Placed a 10% tariff on all imported goods– Abandoned free trade

• The British abandonment of Gold and free trade illustrated the new government methods of intervention during the crisis in attempts to alleviate the effects of the Great Depression

THE GREAT DEPRESSION IN THE DEMOCRACIES

• Great Britain– The National Government’s plan was largely

successful• Avoided the international banking crisis• Increased industrial production• Lowered interest rates > housing market expanded• improved standard of living • Avoided extreme reforms

– Stanley Baldwin took office after MacDonald retired in 1935

THE GREAT DEPRESSION IN THE DEMOCRACIES

• France– Opposite of British situation

• Harsher effects, yet never harsh unemployment• Lowered industrial wages• Government raised tariffs to protect domestic industries

– They only had marginal effects, however• Elected another Radical government in 1932

– Deflationary Policy» Lowered government spending» Increased interest rates

– Had to deal with the end of reparation payments, which had stimulated the French economy

THE GREAT DEPRESSION IN THE DEMOCRACIES

• France– Right-wing violence

• Favored forms of government including monarchy and military rule

• Opposed parliamentary, socialist, and communist governments

• Had many nationalist tendencies and sympathies, relating them to fascists and Nazis

• Resorted to riots and propaganda to spread their influence• Their activities weakened the strength of the prevailing

republican government and exposed government atrocities and corruption that they sought to end

THE GREAT DEPRESSION IN THE DEMOCRACIES

• France– Right-wing violence

• Clashed with left-wing forces on February 6, 1934, when they attempted to storm the Chamber of Deputies– Many were killed and injured– Resulted in a new ministry of former government

premiers that controlled the economy by decree

THE GREAT DEPRESSION IN THE DEMOCRACIES

• France– Socialist-Communist Cooperation

• In the mid 1930’s, some sects of the political left began to make peace in order to gain power and influence

• Socialists, led by Leon Blum, were reluctant to do so since the split with the Communist Party over joining the Soviet Union’s Comintern in 1920

• Eventually united out of fear of Hitler’s effect of the success of left-wing socialism

• Their new coalition was known as the Popular Front

THE GREAT DEPRESSION IN THE DEMOCRACIES

• France– The Popular Front

• Established in July 1935• Included all left-wing parties• Gained a majority in the Chamber of Deputies in

1936• Led by Leon Blum• Pursued a socialist policy through a parliamentary

government

THE GREAT DEPRESSION IN THE DEMOCRACIES

• France– Blum’s Government

• Faced growing discontent in French industries– Riots and demonstrations became more popular– Blum organized a meeting of industry officials to deal with the

problem and overcome labor hostility in society» Raised industrial wages significantly» Employers were required to recognize unions» Granted collective bargaining rights» Established the forty-hour work week

• Instituted programs of public works• Increased spending in industries and military arms• Devalued currency• His reform programs were eventually stopped by conservatives• Blum resigned in 1937, and the government was replaced in

1939

THE NAZIS IN GERMANY

• Depression and Political Deadlock– The Parliamentary government was replaced by a

Coalition government of Centrists and Social Democrats (SPD) just before the financial crisis• Disagreements ensued once the crisis began• The government was dissolved in 1930

– Heinrich Bruning was appointed chancellor by Pres. von Hindenburg soon afterwards• Governed through “emergency” presidential decrees• The Reichstag was thus rendered useless and powerless• Economic downturn > sharp rise in unemployment• The sharp rise in unemployment led to the rise in

significance of the Nazi Party in Germany

THE NAZIS IN GERMANY

• Depression and Political Deadlock– After the economic crisis had taken hold, many

sought relief in the policies of the Nazis– Nazis brought a new political environment to

Germany during their power• Large military force• Loss of political civility and decency• The unemployed joined the anti-socialist storm

trooper (SA) forces• Emphasis on nationalism• Mass rallies

THE NAZIS IN GERMANY

• Hitler Comes to Power– The economic political deterioration caused Hitler to

win an election against and take power from Bruning• Hindenburg attempted to use Hitler and the Nazis without

actually giving them power• Hindenburg ordered another election while denying Hitler

the office of Chancellor– Nazis lost some authority in the election

• Many began to resign out of fears of a political civil war in Germany

• Kurt von Schleicher, the new Chancellor attempted to bring the Nazis into a coalition government, but failed

• Ultimately, Hindenburg was persuaded to name Hitler the Chancellor in an largely conservative German government

THE NAZIS IN GERMANY

• Hitler’s Consolidation of Power– Hitler quickly attempted to ensure and consolidate his

power once in legal office• Obtained full legal authority• Crushed all other political groups• Suppressed rivals within his own party

– A fire set by a mentally ill Dutch communist at the Reichstag building in 1933 prompted Hitler to declare a national emergency• He convinced the population that Communists were out to

destroy the authority of the Nazis• He quickly used the event as a rationale for his suspending of

civil rights and liberties and the mass arrest of Communists

THE NAZIS IN GERMANY

• Hitler’s Consolidation of Power– The Enabling Act

• The fear that surrounded the supposed “Communist threat” allowed the Nazis to control the Reichstag

• The Enabling Act, passed in March 1933, allowed Hitler to rule by decree, giving him limitless power

• Hitler outlawed all political parties in opposition to his own power• Took control of many different forms of media and industries for

his nationalist cause

– Internal Purges• Hitler ordered the death of many Nazi officers whom he saw as a

threat to his powers• Upon the death of Pres. Hindenburg, Hitler consolidated the

office of Chancellor and President, making his the sole ruler of Germany

THE NAZIS IN GERMANY

• The Police State and Anti-Semitism– Hitler developed a police force called the SS

• Led by Heinrich Himmler• Carries out the Blood Purges• Leading enforcement force in Germany

– Attack on the Jews• Police forces most commonly attacked German Jews• Discrimination against Jews was based on the

biological theory behind Social Darwinism and the concept of racial supremacy

• Attempted to organize boycotts of Jewish stores, but were unsuccessful

THE NAZIS IN GERMANY

• The Police State and Anti-Semitism– Racial Legislation

• The Nuremberg Laws– Eliminated Jewish citizenship in Germany– Marriage (and the other stuff) between Jews and non-Jews

was prohibited– Closed many professions and occupations to Jewish

individuals– Allowed public harassment and humiliation of Jews

• Kristallnacht – The Nazis ordered the burning/destroying of Jewish stores

and institutions in November 1938 in order to forbid them from engaging in business operations

– Began to instill the concept of the supreme Aryan race in Germany

THE NAZIS IN GERMANY

• The Police State and Anti-Semitism– Racial Legislation

• This Anti-Semitism ultimately resulted in the devastating Holocaust in 1941 and 1942 in order to completely eliminate the German Jewish population

THE NAZIS IN GERMANY

• The Lives of Women in Germany– Hitler’s goal for the German state was to produce

“racially pure” Germans• Mothers were to preserve racial purity by creating more

healthy and pure Germans• Mothers were to create strong children for the betterment of

the German state– Illustrated the emphasis on nationalism borrowed from the fascists

in Italy• Women who were unable to produce healthy children were

deemed undesirable and were the target of discrimination• Despite this ideology, the population of working women rose

under Nazi rule– Jobs for women were protected, but they were only encouraged to

participate in occupations that were natural for their gender

THE NAZIS IN GERMANY

• Nazi Economic Policy– Hitler was still forced to deal with the financial crisis

of the Great Depression• Hitler had gained power because of the great

unemployment, and he successfully combated this issue in Germany– In many respects, Hitler was the most economically

effective ruler in Europe– This helped him maintain popularity and political power

• Nazi policies fell just short of Communism– Allowed for private property and limited private industry– government still controlled most of the economy

• Instituted new public works and infrastructural programs

FASCIST ECONOMICS IN ITALY

• Syndicates– Fascists sought an economic system between

socialism and a free market– eventually came to be called corporatism– Industries were organized into syndicates

• These groups allowed for controlled negotiations and settlements between labor and management authorities

• Cornerstone of their economy based on private capitalism but allowed government intervention in economic disputes

• Sought overall productivity for the good of the nation

– Eliminated union activity in Italy

FASCIST ECONOMICS IN ITALY

• Corporations– Industrial syndicates were reorganized into groups called

corporations• Grouped all industries devoted to the production of a group of

products together• The Italian economy was made up of twenty-two corporations• The Chamber of Deputies was replaced with the Chamber of

Corporations• Only increased economic corruption, not production as it was

intended to• Gave more control over the economy to the government, as

was sought by the Fascist authorities

– Fascism ultimately resulted in economic downturn in Italy

STALIN’S SOVIET UNION

• Rapid Industrialization– Until 1927, the Soviet economy was dominated by

Lenin’s New Economic Policy (NEP) which was supported by Stalin• By this time, industrial production had begun to slow• To increase industrialization, Stalin pursued a policy of

heavy industrial development, a departure from the NEP• Stalin organized a series of “five-year plans” which were

goals for greater industrialization and manufacturing that the government would attempt to reach in 5 years– New government intervention in the limited free market

economy outlined in the NEP

STALIN’S SOVIET UNION

• Rapid Industrialization– Stalin committed to building the Soviet Union’s

industrial power during the era to surpass that of western nations• New industrialization created a large factory workforce• Built factories, electric plants, tractors, etc.• New cities were created• Very poor living conditions (as had been seen during the

Industrial era in the west)• Used propaganda to market this industrialization as

beneficial to the Soviet Union and its people• Were ultimately successful in strengthening their

economy

STALIN’S SOVIET UNION

• The Collectivization of Agriculture– Agricultural productivity created a problem for the

Soviet Union• Rural peasant farmers would sell their grain to the

government for relatively low prices, and were unable to purchase many consumer goods because of their scarcity

• Farmers would often hoard their grain and save it for when prices rise or when they are able to purchase more goods

• This resulted in a shortage of grain for the government to distribute to the rising urban population

• To combat this issue, Stalin reversed NEP policy by collectivizing agriculture under state control

STALIN’S SOVIET UNION

• The Collectivization of Agriculture– Collectivized agriculture

• Instead of small, privately owned farms, the government would run large state farms called collectives

• This put the government in control of another major industry• This allowed peasant farmers to work in the new urban work

districts (most often in the factories)• Stalin portrayed the farmers as an evil force which was causing

the food shortages• The government used violent force to eliminate or overpower

the peasant farmers (referred to as kulaks)– Over two million farmers were killed in the violence or in prison

camps • Never alleviated the grain shortages until 1991

STALIN’S SOVIET UNION

• Flight to the Soviet Cities– Collectivization had forced the kulak peasant

farmers from their homeland and into the urban population

– About 12 million peasants migrated to major cities

– The populations in urban areas grew rapidly during this era

STALIN’S SOVIET UNION

• Urban Consumer Shortages– Very little housing

• Families often shared very cramped quarters

– Shortage of consumer goods in urban areas• Less food• Shortage of bread• What little goods there were, were often reserved for Soviet

party members, who had a considerably higher standard of living

– Weak infrastructure• Crowded or insufficient transportation systems• Insufficient sewer systems• Lacked running water, paved streets, and electricity in some

areas• Increased crime and spread of disease

STALIN’S SOVIET UNION

• Foreign Reactions and Repercussions– Many European officials regarded the Soviet

experiment as childish and naive• Many were too focused on domestic affairs and the Great

Depression to give much attention to the Soviet Union, even though the Soviets had flourished during this era

– Many western Communists and Socialists viewed the society as an example of how communism could be implemented in other places• They overlooked the vast food and supply shortages, and

the cost of human life needed to maintain that society– Stalin’s new fear of war with Nazi Germany caused

him to allow no-communist forces to cooperate with those in the Comintern against Nazi or Fascist powers

STALIN’S SOVIET UNION

• The Purges– Though opposition to the political shifts of Stalin away

from Lenin and the NEP were moderate, they still became evident during the 1930’s

– Stalin punished these dissenters with the Great Purges• These events remain mysterious and incomplete to

historians and archivists• Stalin authorized the murdering of his political opponents

or those he feared might take his ruling place• Many people were accused of sabotage, arrested and sent

to prison or labor camps• Much of this terrible and cruel action took place because of

Stalin’s fear of losing control and lust for absolute power• It is estimated that millions upon millions were killed