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Europe & The Great Depression of the 1930’s Chapter 27 Toward the Great Depression • 1920’s > “roaring” in the US • 1929 severe downturn – High unemployment – Minimal trade – Low Production • Fight for economic security • Governments abandon market economy > lean toward mixed economy – More govt. involvement • 3 reason for severity and length of depression – Financial crisis from war & peace settlement – Crisis in production & distribution of goods in world market – Lack of leadership from major powers Financial Tailspin • Uncontrolled inflation – Nations seek to keep value of their currency – Germany > example • War-debt another issue – France & US sought reparations aggressively • Germany > main target for money – Reparations made normal business difficult • Small trade & low production > increases unemployment • American investments – Dawes Plan > smoothed debt payments – US > loaning money > loans invested in the stock market > crash > major issue • No more loaning money (Europe) > US can barely solve its own problems • End of reparations – German economy on the edge of collapse – Herbert Hoover gives one-year moratorium > prelude to the end of reparations > official in 1932 Problems in Agricultural Commodities • Market for European goods shrinks in the 1920’s – Why? • Improved farming methods across the globe • World supply of grain increases • Trouble for European farmers – Goods they used more expensive – Prices for their commodities plummeted • Result > stagnation & depression Depression & Government Policy • New economic sectors develop – – – – Automobiles Radios Synthetics Service industries • People working are frustrated > not moving up the ladder • Governments not fit to confront problems • New economic thought emerges – Based on John Maynard Keynes • Govt. needs to step in when market is in a downturn • More govt. spending to stimulate economy – Private enterprise now subject to regulations Confronting the Great Depression in the Democracies • Political life changes in Great Britain and France • Great Britain – New coalition govt. – Abandonment of old sacred economic policies • France – Creation of political and economic program Great Britain: The National Govt. • 1929 > unemployment > major issue – Labour party in charge > what to do? – Ramsay MacDonald > prime minister • Slash budget • Reduce govt. salaries • Cut unemployment benefits – MacDonald forms coalition ministry made up of labour, liberal, and conservatives called the National Govt. • Tried to balance budget • Britain went off the gold standard • Import Duties Bill – Britain first to restore production in Europe (1934) • Unemployment persisted – Neville Chamberlain takes over in 1937 • Seen as a more progressive thinker France: The Popular Front • • Not affected by depression until 1931 Major problem > industrial stagnation – Coalition Govt. (radical) > lower govt. spending & increase interest rates – Reparation payments end • Right wing violence – Groups favoring monarchy or military rule grew • • Resembled fascists in Italy Reeked havoc on political life – Stavisky Affair > showed corruption in rep. govt. • Left wing cooperation – Popular Front est. 1935 > coalition of left wing parties – Controlled govt. under Leon Blum • • Blum’s Govt. – – – • Pursued socialism through democratic govt. Labor strikes > major problem Blum > raised wages, recognized unions, est. 40 hr. work week, govt. loans to small industry, etc. Pressure causes halt in reform Political life in jeopardy again > no faith in republic Germany: The Nazi Seizure of Power • Most remarkable political event stemming from Great Depression – National Socialists (Nazis) coming to power • Took advantage of fragile economy and Weimar constitution Depression and Political Deadlock • 1928 end of parliamentary govt. in Germany – Coalition of parties governed • Dissolves in 1930 > could not solve economic issues • President > Hindenburg • Chancellor > Heinrich Bruning • Bruning governs through decrees – Weimar Republic becomes authoritarian regime • Unemployment rises to 6 million in 1930 • Nazis gain seats in Reichstag – Use terror & intimidation – Gain power legally through impressive electoral results Hitler Comes to Power • 1932 Hindenburg up for reelection – Hitler runs against him > loses narrowly in a run off • Franz Papen made chancellor – Govt. needs support Nazis have – Nazis gain more seats in Reichstag • Papen resigns > Kurt Schleicher takes over – Tried to gain Nazi support without Hitler • Fails > political disorder in Reichstag – No support from Hindenburg Schleicher resigns • Hitler becomes chancellor in 1933 – Occurs b/c of political turmoil created by depression – Draws support from farmers, war veterans, and the young – Promise of security and effective govt. > also restore Germany to power – Not afraid to address issues in Germany Hitler’s Consolidation of Power • Moves quickly to consolidate control – Capture full legal authority – Crush alternative political groups – Purge rivals within • Reichstag fire – Excuse to take care of communist threat – Under Article 48 issues an emergency decree to suspend civil liberties • Enabling Act – Hitler could now rule by decree > no limits • Eliminates all potential opposition • Party Purges – SA officers a threat > so they are killed – Hindenburg dies • Hitler combines both offices > becomes sole ruler The Police State and Anti-Semitism • Germany becomes a police state • Police surveillance > SS – Lead by Himmler > very close to Hitler – Previously they were Hitler’s bodyguards • Jews main target of terror – Nuremburg Laws > robbed Jews of citizenship – Who is defined as a Jew? • Depends on the number of Jewish parents & grandparents • Very complex • Kristallnacht – Jews forbidden to engage in business – Nov. 9 and 10, 1938 Jewish businesses and synagogues burned • Final Solution Racial Ideology & the Lives of Women • Women’s job – Reserve racial purity • Give birth to pure Germans • Only certain women seen as racially fit to give birth • Policy of selective breeding • Focus is on the state not individual • Nazi legislation gave breaks to families who followed this policy • Nazis protected women’s jobs – Pursue jobs “natural” to their character • Examples? • Women seen as the protector of German cultural values Nazi Economic Policy • Hitler successful at attacking unemployment – This success gave his regime credibility – Give up political and civil liberties and you can achieve full employment – Major programs of public works and spending • Most related to rearmament • Improved transportation (for military) • Govt. controlled all aspects of economy • 1935 Germany renounces Treaty of Versailles Italy: Fascist Economies • Fascists sought to stabilize social & economic life – Mussolini attempts to make Italy self-sufficient • Depression > obstacle > production, exports, and wages fell • Economic policy > corporatism – – – – Medium between socialism and liberalism Private ownership of capital Govt. arbitration of labor disputes Syndicates formed > made up of labor and management • After 1930, syndicates reorganized into corporations – – – – Group industries into a major area > example > agriculture 22 in total Chamber of Deputies replaced > Chamber of Corporations Govt. now has more control not owners and consumers • 1935 Italy invades Ethiopia – League of Nations issue economic sanctions Stalin’s Soviet Union • Russia experienced industrial advance during the Great Depression • Economic growth achieved through the death of millions The Decision for Rapid Industrialization • Stalin’s Goal? – Overtake the productive capacity of its enemies – Build up industries, such as iron, steel, electricity, etc. • Organized five year plans – Gosplan > set goals and work to achieve them • Rapid expansion of industry – Large factory labor force • Workers lived in deplorable conditions • Used propaganda to ensure cooperation – Appealed to the young • Production grew rapidly – From 1928 to 1940 > rose 400% – Human cost for this was appalling The Collectivization of Agriculture • Agricultural productivity had always been a problem – When the govt. bought grain, they set prices > leads to hoarding • Stalin’s solution? – Collectivize grain and other products for domestic use and foreign export (collectivization) – Huge state run farms > collectives – Blamed kulaks (small prosperous peasant farmers) for economic problem with the grain issue • Eventually, sought to eliminate them • Caused chaos and violence in the countryside • Peasants who resisted outright were killed • Result? – Millions dead – Still could not produce enough food Flight to the Soviet Cities • 12 million peasants flee the countryside • Many move to the cities – Urban population grows rapidly • Huge migration is a direct result of the violence the govt. inflicted on the countryside Urban Consumer Shortages • Housing issue – Many workers lived in barracks – Cramped apartments • Shortage of food and clothes – Consumed less food than the Russian Revolution • City infrastructure was lacking – Poor transportation and sewerage – Water and electricity were issues – Crime and disease widespread • Mode of coping known as the blat Foreign Reactions & Repercussions • Capitalist nations shocked at the how quickly the Soviet economy had grown • Foreign policy shift – Stalin afraid of Nazi Germany – Allows communist parties to cooperate with non communist parties against fascism The Purges • Stalin’s policies aroused internal opposition – Opposition found amongst lower level parties • Stalin’s paranoia leads to the Great Purges – Most mysterious and horrendous political events of the 20th century – Pretext > assassination of Sergei Kirov – Prior sabotage and disloyalty was met with death • Show trials 1936-38 held in Moscow – – – – Included former high soviet leaders killed Lower level party members killed Possibly millions of ordinary citizens killed > no trial Then came govt. officials and members of the military • Justification? – Settle old scores and create discipline – Fear for his own power and ruthless determination to preserve and increase it