the Great Depression

the Great Depression

1. The Wall Street Crash

   • October 1929 - share prices began to fall on Wall Street stock exchange in New York, this meant people's investments fell in value
   • People rushed to sell shares before they fell further
     • panic sent selling prices even lower

2. Economic Effects

   • Banks were huge investers - suffered huge losses - people rushed to get their money back, so some banks ran out of cash
   • German industrial output fell and unemployment rose
   • Worldwide depression was a disaster for export industries but high unemployment meant that domestic demand for goods fell too. Unemployment rose further.

3. Social and political effects

   • The middle classes lost savings, their companies or their homes
   • Workers became unemployed
   • 1930 to 1932 - Heinrich Bruning was chancellor, he proposed:
     • Raising taxes to pay the cost of unemployment benefit
       • This pleased no one
         • Right-wing & middle classes and wealthy opposed higher taxes
         • Left-wing & working classes opposed lower benefits
         • Bruning lost control of Reichstag, the economy and the streets. He resigned in 1932, leaving a dangerous power vacuum for a new leader to step into
     • Reducing unemployment benefit to make payments more affordable