The Years of Depression
There was some financial stability between 1924 and 1928. The German investments and industrial recovery was possible only through short term loans from the USA. In 1929, when the Wall Street Exchange crashed, the US withdrew all the loans. People rushed in to sell their shares as they thought that the prices would go down drastically. It was said that on the 24th October alone about 13 million shares were sold. This was the beginning of the Great Economic Depression.
The national income of the US fell by nearly 50% between 1929 and 1932. The factories were shut down, exports fell, farmers were affected badly and the speculators withdrew their money from the market. All these affected not only the US but the entire world.
The Economic Crisis and Germany:
- The industrial production came down to less than 40% compared to 1929.
- Workers either lost their jobs or were paid less.
- About 6 million people were left without any employment.
- As jobs disappeared the youth took to criminal activities.
- Total despair became common place.
- People faced deep anxiety and fear.
- The saving of salaried people and the pensioners began to diminish when the value of money went down.
- Small businessmen, the self employed and retailers were ruined.
- There was a fear among the people of proletarianisation, which would reduce the businessmen and the self employed to the rank of working class.
- Though the organised workers could manage the situation, they could not bargain much because of the unemployed.
- Big business was not possible.
- The sharp fall in prices affected the peasants to a great extent.
- Women were in deep despair as they could not feed their children properly.
The Political Defects of the Weimar Constitution
Defects of Weimar Constitution
- It was unstable and vulnerable to dictatorship.
- The proportional representation (which required one party to get majority) became impossible and resulted in a rule by coalition.
- The Emergency Powers were given to the President under Article 48 of the constitution:
a) power to impose emergency.
b) Suspend civil rights.
c) Rule by decree. There was a liberal use of Article 48. The Weimar Republic saw 20 Cabinets lasting on an average of 239 days.
- People lost confidence in the Democratic Parliamentary system as it did not solve their problem.