Germany's financial collapse in the summer of 1931 was one of the biggest economic catastrophes of modern history. It led to a global panic, brought down the international monetary system, and turned a worldwide recession into a prolonged depression. The crisis also contributed decisively to the rise of Hitler. Within little more than a year of its onset, the Nazis were Germany's largest political party at both the regional and national level, paving the way for
Hitler's eventual seizure of power in January 1933.The origins of the collapse lay in Germany's large pile of foreign debt denominated in gold-backed currencies, which condemned the
German government to cut spending, raise taxes, and lower wages in the middle of a worldwide recession. As political resistance to this policy of austerity grew, the German government began to question its debt obligations, prompting foreign investors to panic and sell their German assets. The resulting currency crisis led to the failure of the already weakened banking system and a partial sovereign default.Hitler managed to profit from the crisis because he had been the
most vocal critic of the reparation regime responsible for the lion's share of German debts. As the financial system collapsed, his relentless attacks against foreign creditors and the alleged
complicity of the German government resonated more than ever with the electorate. The ruling parties that were responsible for the situation lost their credibility and became defenceless in the face of his onslaught against an establishment allegedly selling the country out to her foreign creditors. Meanwhile, these creditors hesitated too long to take the wind out of Hitler's sails by offering debt relief. In this way, a financial crisis soon developed into a political catastrophe for both
Europe and the world.
Germany's financial collapse in the summer of 1931 was one of the biggest economic catastrophes of modern history. It led to a global panic, brought down the international monetary system, and turned a worldwide recession into a prolonged depression. The crisis also contributed decisively to the rise of Hitler. Within little more than a year of its onset, the Nazis were Germany's largest political party at both the regional and national level, paving the way for
Hitler's eventual seizure of power in January 1933.The origins of the collapse lay in Germany's large pile of foreign debt denominated in gold-backed currencies, which condemned the
German government to cut spending, raise taxes, and lower wages in the middle of a worldwide recession. As political resistance to this policy of austerity grew, the German government began to question its debt obligations, prompting foreign investors to panic and sell their German assets. The resulting currency crisis led to the failure of the already weakened banking system and a partial sovereign default.Hitler managed to profit from the crisis because he had been the
most vocal critic of the reparation regime responsible for the lion's share of German debts. As the financial system collapsed, his relentless attacks against foreign creditors and the alleged
complicity of the German government resonated more than ever with the electorate. The ruling parties that were responsible for the situation lost their credibility and became defenceless in the face of his onslaught against an establishment allegedly selling the country out to her foreign creditors. Meanwhile, these creditors hesitated too long to take the wind out of Hitler's sails by offering debt relief. In this way, a financial crisis soon developed into a political catastrophe for both
Europe and the world.
Preface
Introduction
Confidence
1: Laughing at the Raven
2: A Triumph of Diplomacy
3: 'Strong Cards to Play'
Indecision
4: Hitler's Victory
5: To the Brink and Back
6: 'The First Real Chancellor Since Bismarck'
Despair
7: Squaring the Circle
8: Help from Washington
9: Endgame
10: The Rise of Hitler
Epilogue
Sources
References
Notes
Index
Tobias Straumann, Associate Professor of Economic History,
University of Zurich
Engaging book
*Foreign Affairs*
The value of Swiss historian Tobias Straumann's book is that it
focuses our attention squarely on the drama of that year, the
moment when the fragile political and financial order restored
after the first world war came apart ... a fast-paced and elegantly
constructive narrative... If John Kenneth Galbraith forever etched
the 1929 crash into historical consciousness, with his classic 1955
account, Straumann has given us the narrative of 1931 that every
decision maker in Europe should read.
*Adam Tooze, Financial Times*
Tobias Straumann's book is a welcome addition ... Straumann ably
shows the progress of the German crisis and how it was intertwined
with the vexed issues or reparation ... Straumann relates [...]
complex events with remarkable clarity, largely eschewing jargon
and displaying considerable panache. Rarely has the dismal science
been less dismally presented. Happily, for those wishing to write
about Nazism's rise, there is now an accessible, non-specialist
volume to explain the economic aspect.
*Roger Moorhouse, BBC History Magazine*
Tobias Straumann's 1931, is, like George Orwell's 1984, dour and
disturbing; ironic and important.
*David Marx: Book Reviews*
a vivid and very readable account... a wake-up call for today's
politicians and economic policy makers
*Kirsten Wandschneider, EH.Net*
A stunning, fast-paced and deeply researched narrative that
accurately delineates the links between financial panic and
political collapse in the most iconic case of all: the destruction
of democracy in Weimar Germany.
*Harold James, Claude and Lore Kelly Professor in European Studies,
Princeton University*
In this engaging book, Straumann, a leading Swiss economic
historian, examines a critical factor in Adolf Hitler's rise to
power.
*Foreign Affairs*
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