Download The Great Depression in Europe

CHAPTER27
THE GREAT DEPRESSION IN EUROPE
GeoffBruno
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
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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
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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
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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
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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
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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
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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