5. The Decline of the Weimar Republic
1. Impact of World Economic Crisis on Germany
Germany suffered the consequences of the W.S.C more than any other country
US loans and investment ceased and demands quickly followed for the repayment of
previous short-term loans
The crisis caused a further decline in the price of food and raw materials as the industrialised
nations reduced their imports
As demand for exports collapsed, world trade slumped and German industry could no longer
pay its way
Without overseas loans and with its export trade falling, prices and wages fell and
bankruptcies increased
Economic effects Key features
Trade Exports value fell by 55%
Slump in world trade. Demand for German exports fell rapidly 1929=£630m
e.g. steel/machinery/chemicals 1932=£280m
Employment No. of registered unemployed
Mass unemployment 1929=1.8m
1932=5.6m
1933=6m
Industry Production (1928=100%)
Industrial production declined sharply 1929=100
1932=58
Agriculture Agricultural prices (1913=100)
Wages and incomes fell sharply. Many farms sold off 1927=138
1932=77
Finance 5 major banks collapsed in 1931
Banking sector dislocated by loss of confidence 50,000 businesses bankrupted
However, Germany’s economic crisis cannot simply be blamed on the W.S.C as there
were fundamental weaknesses in the German economy before the crash, “we are
dancing on a volcano”
Balance of trade was in red
No. of unemployed averaged 1.9m in 1929
Many farmers were already in debt and had been facing falling incomes since
1927
Gov. finances from 1925 were continually run into deficit
Layton’s conclusion: “The world economic crisis should really be seen as simply the final
blow that wrecked the Weimar economy, not the fundamental cause of its crash”
W.S.C accelerates economic problems and therefore political problems
Human effects of Great Depression
By Jan. 1932, unemployment stood at 6.1m and did not substantially fall until the spring of
1933
1. Impact of World Economic Crisis on Germany
Germany suffered the consequences of the W.S.C more than any other country
US loans and investment ceased and demands quickly followed for the repayment of
previous short-term loans
The crisis caused a further decline in the price of food and raw materials as the industrialised
nations reduced their imports
As demand for exports collapsed, world trade slumped and German industry could no longer
pay its way
Without overseas loans and with its export trade falling, prices and wages fell and
bankruptcies increased
Economic effects Key features
Trade Exports value fell by 55%
Slump in world trade. Demand for German exports fell rapidly 1929=£630m
e.g. steel/machinery/chemicals 1932=£280m
Employment No. of registered unemployed
Mass unemployment 1929=1.8m
1932=5.6m
1933=6m
Industry Production (1928=100%)
Industrial production declined sharply 1929=100
1932=58
Agriculture Agricultural prices (1913=100)
Wages and incomes fell sharply. Many farms sold off 1927=138
1932=77
Finance 5 major banks collapsed in 1931
Banking sector dislocated by loss of confidence 50,000 businesses bankrupted
However, Germany’s economic crisis cannot simply be blamed on the W.S.C as there
were fundamental weaknesses in the German economy before the crash, “we are
dancing on a volcano”
Balance of trade was in red
No. of unemployed averaged 1.9m in 1929
Many farmers were already in debt and had been facing falling incomes since
1927
Gov. finances from 1925 were continually run into deficit
Layton’s conclusion: “The world economic crisis should really be seen as simply the final
blow that wrecked the Weimar economy, not the fundamental cause of its crash”
W.S.C accelerates economic problems and therefore political problems
Human effects of Great Depression
By Jan. 1932, unemployment stood at 6.1m and did not substantially fall until the spring of
1933
