But the economic depression had begun to knock the foundations out from under prosperity and moderation. An economic depression is a sharp and deep decline in trade and general prosperity.
In the worldwide depression of 1873 to 1896, prices had fallen, agricultural distress had intensified—made worse in Europe by bad harvests followed by wet summers and by competition from Argentine and Australian meat and Canadian and American grain—and banks had collapsed, especially in Austria and France.
While scholars do not agree on the long-range causes of the depression, it was apparent to all that the new “world slump” of 1929-1934, while short, was extremely intense and was particularly destructive of middle-class confidence in the United States, Germany, and Austria.
The depression had, in fact, already begun before the Wall Street stock market crash in October 1929, for agriculture had declined as overproduction and poor distribution brought prices down and as speculation on the stock market had led to general financial recklessness. American banks now withdrew their funds from Europe. The Austrian Kredit-Anstalt, the largest commercial bank in Austria, was made bankrupt in 1931 when the French, themselves in dire economic need, withdrew short-term credit. In Germany a shortage of capital and foreign credits quickly curtailed industrial production, leading to a decline in exports and a reduced need for transportation (especially shipping), which triggered further widespread unemployment.
The need for economic planning seemed evident, and since totalitarian movements of both left and right generally already had a commitment to such long-range planning, those most hurt by what quickly became known as the Great Depression turned increasingly toward these movements and away from a free-market economy.
For capitalists, the Bolshevik solution was not acceptable; for nationalists, convinced that the depression had been caused by unsound economic practices in another country, one solution was tariffs. Since fascist movements advocated economic nationalism and centralized state planning for the economy, they quickly gained new adherents. In Germany unemployment insurance cushioned the first shock for the workers; the lower middle classes, painfully recovering from the period of inflation, had no such barrier between them and destitution.
Their desperation helped Hitler, whose fortunes during the years of fulfillment had fallen low. Meanwhile, however, Hitler was preparing the instruments of force, especially by creating the Schutzstaffel (Defense Force, or SS), an elite, black-shirted guard of honor under the direction of Heinrich Himmler (1900-1945). The SS membership requirements emphasized “racial purity,” and its members would become the nucleus for the Gestapo, or “secret police.”
The government fell in 1930 over a disagreement on unemployment insurance benefits. Hindenburg appointed as chancellor Heinrich Bruning (1885-1970), a member of the Catholic Center party, and instructed him to shape an emergency cabinet not restricted by party allegiance. President Hindenburg, now eighty-two, had fallen under the influence of General Kurt von Schleicher (18821934), an ambitious and clever political soldier who had schemed his way into the president’s favor. Hindenburg wanted to rule by decree, as the constitution authorized him to do in an emergency. By failing to pass Bruning’s economic program, the Reichstag gave Hindenburg the opportunity he wanted.
A presidential decree proclaimed the new budget. When the Reichstag protested, Hindenburg dissolved it and called new elections for September 1930. Nazis and Communists fought in the streets and both gained greatly at the expense of the moderates. The Nazis’ Reichstag representation rose from 12 to 107 and the Communists’ from 54 to 77. Bruning had to carry on against the wishes of the electorate; supported only by Hindenburg, he, too, now turned authoritarian.
Political matters were now fueled almost exclusively by the deepening economic crisis. To avoid a new government in which Nazis would participate, the Social Democrats decided to support Bruning. When the Reichstag met, Nazis and Communists created disorder on the floor but voted together against government measures. These measures passed only because the Social Democrats voted for them.
In 1931 Bruning tried to arrange an Austro-German customs union to coordinate the tariff policies of the two countries and help them fight the depression without affecting their political sovereignty. Whether such an arrangement between two countries that were both suffering from unemployment would actually have succeeded cannot be surmised; the impulse for Germany and Austria to unite politically might not have proved overpowering. In any case, the project raised in the minds of the Allies, especially the French, the specter of a “greater Germany,” and the scheme was vetoed by the World Court.
Nazis, Nationalists, the veterans’ organization of the Steel Helmets (Stahlhelm), the Junkers’ Agrarian League, industrialists, and representatives of the former princely houses now formed a coalition against Bruning. This coalition had great financial resources, mass support, and private armies in the SA, the Stahlhelm, and other semi-military organizations. Because the left was split, nothing stood between this new right-wing coalition and political victory except Hindenburg, who controlled the army. Early in 1932 Hitler was invited to address a meeting of coal and steel magnates, whose financial support he won. Though some of Hitler’s followers were now impatient for a new putsch, he curbed them, believing that the Nazis could come to power legally.
In the presidential elections of March 1932, Hitler ran as the candidate of the Nazis, and Hindenburg as the candidate of the Center, Social Democrats, and other moderate parties. Hitler polled 11,338,571 votes, and Hindenburg polled 18,661,736, four tenths of a percent short of the required majority. In the runoff election, the Nationalists backed Hitler, whose total rose to 13,400,000, as against Hindenburg’s 19,360,000. The eighty-four-year-old marshal reelected as the candidate of the moderates was, however, no longer a moderate himself, but the tool of the Junkers and the military.
Responding to pressure from the state governments, Bruning and Hindenburg tried to ban the SA and SS, while Schleicher orchestrated protests against such a ban. Feeling he had been ill advised, Hindenburg told his chancellor he would not sign any further emergency decrees, and Bruning resigned. Schleicher persuaded Hindenburg to appoint Franz von Papen (1879-1969), a rich Catholic nobleman and a member of the extreme right wing of the Center, and he installed a cabinet composed of other noblemen.
The Center, however, disavowed Papen, who had the support of no political party or group. The Nazis temporarily tolerated him because he agreed to lift the ban on the SA and SS. But in foreign policy, Papen succeeded where Bruning had failed, for the Allies scrapped the Young Plan and required Germany to pay only 3 billion gold marks into a fund earmarked for general European reconstruction.
On July 31, 1932, new elections for the Reichstag took place, called by Papen on the assumption that the Nazis had passed their peak, that their vote would decrease, and that they would then cooperate in the government. However, on July 20 Papen had dismissed the government of Prussia, where there had been over five hundred confrontations between storm troopers and those they saw as their enemies, on the grounds that it could not maintain public order. This played into the hands of the Nazis, who won 230 seats to become the biggest single party in the Reichstag; the Communists gained also, chiefly at the expense of the Social Democrats. The Democrats and the People’s party almost disappeared.
Papen had failed. He now wanted to take some Nazis into the government, but the Nazis demanded the chancellorship, which Hindenburg was determined not to hand over to Hitler. Papen decided to dissolve the Reichstag and call new elections. By repeating this process, he hoped to wear down Hitler’s strength each time, until he brought Hitler to support him and accept a subordinate place. Papen also put pressure on the industrialists who had been supporting Hitler, and Nazi funds began to dry up, leaving Hitler seriously embarrassed. The election of November 6, 1932, bore out Papen’s expectations. The Nazis fell off from 230 seats to 196; and although the Communists gained substantially, Papen, too, won some support.
Thus emboldened, Papen designed a constitutional change that would have moved the Weimar Republic even closer to the policies of the corporative state: power was to be returned to the hands of the propertied elite. Schleicher persuaded Hindenburg that the plan was naive and tried desperately to form a new majorirv. Failing, he stepped down, leaving the way clear for Hider as the only person with a program and public support. Hitler demanded the chancellorship for himself.
Papen consented, provided Hitler undertook to govern in strict accord with parliamentary procedure. Papen was to be vice-chancellor, and still thought he could dominate the government, since only three of its eleven ministers would be Nazis. He therefore persuaded Hindenburg to accept Hitler as chancellor. But Papen underestimated Hitler. Though Hitler swore to Hindenburg that he would maintain the constitution, he did not keep his oath. The Weimar Republic was doomed from the moment Hitler became chancellor on January 30, 1933.