Tuesday, September 6, 2022

What Was The Actual Affect Of The September 1929 Stock Market Crash On Germany?

 Well....rather than making this a 40-page summary, I'll try to limit this to forty-odd lines.

Officially, WW I came to a ceasefire in November 1918.  The real treaty?  It could not be signed until Germany agreed to 'pay' the US, France, and England a 'sum' of money for causing the war.

German troops?  Almost immediately in November of 1918, they packed up and went home. For the next six months, especially around Hamburg, Augsburg an Munich....civil war was potentially a problem.  Around March/April of 1919....the federal government of Germany came to ensure 'peace' and the potential for civil war ended.

Then this long five-year discussion took place over the payment situation.  The British finally brought a retired US general who had US bank connections (in NY City) into the situation, and worked out a 'deal'.  Germany would promise to pay a loan that would require thirty years.  The US banks paid the money straight to the US, French and British governments.  

It's safe to say from 1925, to 1929.....things were on turbo because of that cash-flow to the government.

When September 1929 came around.....the NY City banks were short on cash, and went to the Germans to demand some type of settlement.  The coalition government that existed?  They talked for days over this.....but could not manage a joint decision.

The government (coalition of several parties) fell apart by March 1930.  Normally, there would be an election to resolve this.  The President of Germany at the time said no.....he'd grant 'powers' to the SPD Party (who held the most votes out of the last election), and they'd create a fix to recover from the bank discussions.

You can argue about the 'powers' invented today....lot of criticism that this was a faulty decision, but you could waste another six months for an election and a solution.

As soon as the fix was accomplished....the SPD folks said 'enough', and demanded a new election....thinking it'd help smooth things out.

Well....this moment of weakness seen, was what triggered the Nazi Party to get bold....advance their platforms, and from 14 September 1930 (election day)....the stability of Germany was in doubt.

The SPD Party was never able to resolve the confidence of the public, and the bank loan from WW I.....is what really triggered the Nazis to arrive, with Hitler.

There's probably forty key names out of this period (1918 to 1930), and it misses this really great economic period in Germany from 1925 to 1929....but the crash triggered WW II to occur in the end.

Radio being a big part of this whole story?  Radio sales and stations....didn't really start until 1925 in Germany.  From the beginning....until the Nazis arrived to change the regulations....there were enough laws in place to prevent political parties from using the radio from 1925 to 1931.  After that point....radios figured into the propaganda world. 

We may not grasp this today, and historians have tried to avoid the 1920s because of the financial mess created by the US, French and the UK....but bread-crumbs were left to hasten another war because the first one didn't fix the mess.  

2 comments:

M1-19k said...

The Weimar Republic was not able to meet the peoples needs and the up and coming party were the Bolshevik inspired Munich Reds. Hitler promised to free the German people from the enslavement to the international bankers and restore dignity. Gregor Strauser would have been a much better leader to free the German people from their enslavement.

Schnitzel_Republic said...

After the 1928 national election, there were 15 parties holding seats in the Weimar Republic Reichstag...pretty much the same results for the two elections in 1924, the 1920 election, and the 1919 election.

They would later (after the war) make a rule that you had to have 5-percent of the national vote, to earn a party any seats. Presently? They have seven parties holding seats (likely in the next election that the Linke Party falls from this situation).

The Weimar Republic was simply divided in a major way, with little ability to overcome this weakness.