Great Depression Begins - October 29, 1929

When the stock market collapsed on Wall Street on Tuesday, October 29, 1929, it sent financial markets worldwide into a tailspin with disastrous effects.

The German economy was especially vulnerable since it was built out of foreign capital, mostly loans from America and was very dependent on foreign trade. When those loans suddenly came due and when the world market for German exports dried up, the well oiled German industrial machine quickly ground to a halt.

As production levels fell, German workers were laid off. Along with this, banks failed throughout Germany. Savings accounts, the result of years of hard work, were instantly wiped out. Inflation soon followed making it hard for families to purchase expensive necessities with devalued money.

Overnight, the middle class standard of living so many German families enjoyed was ruined by events outside of Germany, beyond their control. The Great Depression began and they were cast into poverty and deep misery and began looking for a solution, any solution.

Adolf Hitler knew his opportunity had arrived.

In the good times before the Great Depression the Nazi party experienced slow growth, barely reaching 100,000 members in a country of over sixty million. But the Nazi party, despite its tiny size, was a tightly controlled, highly disciplined organization of fanatics poised to spring into action.

Since the failed Beer Hall Putsch in 1923, Hitler had changed tactics and was for the most part playing by the rules of democracy. Hitler had gambled in 1923, attempting to overthrow the young German democracy by force, and lost. Now he was determined to overthrow it legally by getting elected while at the same time building a Nazi shadow government that would one day replace the democracy.

Hitler began his career in politics as a street brawling revolutionary appealing to disgruntled World War One veterans predisposed to violence. By 1930 he was quite different, or so it seemed. Hitler counted among his supporters a number of German industrialists, and upper middle class socialites, a far cry from the semi-literate toughs he started out with.

He intentionally broadened his appeal because it was necessary. Now he needed to broaden his appeal to the great mass of voting Germans. His chief assets were his speech making ability and a keen sense of what the people wanted to hear.

By mid-1930, amid the economic pressures of the Great Depression, the German democratic government was beginning to unravel.

Gustav Stresemann, the outstanding German Foreign Minister, had died in October 1929, just before the Wall Street crash. He had spent years working to restore the German economy and stabilize the republic and died, having exhausted himself in the process.

The crisis of the Great Depression brought disunity to the political parties in the Reichstag. Instead of forging an alliance to enact desperately need legislation, they broke up into squabbling, uncompromising groups. In March of 1930, Heinrich Bruening, a member of the Catholic Center Party, became Chancellor.

Despite the overwhelming need for a financial program to help the German people, Chancellor Bruening encountered stubborn opposition to his plans. To break the bitter stalemate, he went to President Hindenburg and asked the old gentleman to invoke Article 48 of the German constitution which gave emergency powers to the president to rule by decree. This provoked a huge outcry from the opposition, demanding withdrawal of the decree.

As a measure of last resort, Bruening asked Hindenburg in July 1930 to dissolve the Reichstag according to parliamentary rules and call for new elections.

The elections were set for September 14. Hitler and the Nazis sprang into action. Their time for campaigning had arrived.

The German people were tired of the political haggling in Berlin. They were tired of misery, tired of suffering, tired of weakness. These were desperate times and they were willing to listen to anyone, even Adolf Hitler.