Responses to the Great Depression, Democracy under Siege, Kagan, Ch. 27 – pp

What were the causes of the Great Depression? 1.US Stock market crash 2.US call in short-term loans – hits German and Austrian banks hard 3.US banks begin to fail – European banks begin to fail 4.Businesses unable to pay workers – massive lay-offs ensue (see Table 27.1)

An answer to Depression John Maynard Keynes – British economist – Encourages lending and government spending in order to stimulate economic growth Roosevelt’s New Deal

European Democracies’ Responses Two Big Mistakes – Tried to balance budgets and limit spending Higher taxes on imported goods = decline in international trade – Governments became more conservative GB’s Ramsay MacDonald – Labour Prime Minister, BUT supported conservative fiscal policies = coalition government National Unity Government Rise of Authoritarianism – Austria, Spain, Portugal

Adolph Hitler Lower-class Austrian with dreams of being an artist 1914 volunteers for Germany army in WWI – wounded and decorated Upset by Treaty of Versailles, still wants to serve for the good of Germany – joins National Socialist German Workers’ Party (Nazi) – By 1923 he is recognized as a valuable party member

Beer Hall Putsch, 1923 Failed attempt by Nazi Party to overthrow the Bavarian state government Hitler arrested – Writes Mein Kampf Aryan race and Lebensraum theories are outlined

Rise of Nazism “Failures” of Weimar Republic – Political and economic instability Growth of Nazi Party popularity – Charismatic leadership – Adolf Hitler – Simple Promises – restore Germany to its former glory; provide jobs and stable economy; crack down on “enemies” (communists, Jews, profit driven capitalists) of the state – Schutzstaffel (SS) unified group of body guards / followers – Pageantry, excitement, community Nuremberg Rally – Triumph of the WillTriumph of the Will

Hitler comes to Power 1932 – Nazi Party – strongest party in Reichstag 1933 Jan. - elected Chancellor Feb. Reichstag fire = call for emergency powers of decree; outlaws the Communist Party Enabling Act – Hitler given sole power (above the law) to make decisions of “national security”