Within the context 1814 1939, to what extent could the Wall Street Crash be considered the main economic cause of World War II between 1919 1939?

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Hannah Jarvis

Within the context 1814 – 1939, to what extent could the Wall Street Crash be considered the main economic cause of World War II between 1919 – 1939?

History proves that dictatorships do not grow out of strong and successful Governments, but out of weak and helpless ones”

(Franklin D. Roosevelt)

It is a widely held opinion that the Wall Street Crash was the primary economic cause of World War II considering the impact it had globally. However, due to the complex nature of World War II, defining one main cause which determines whether or not the said war will occur is extremely difficult and is a much debated topic amongst historians. One must consider, not only the main catalyst causes like the Wall Street Crash, but also long term factors which have built up over time to cause widespread unsettlement; factors such as the economic weaknesses of the Weimar Republic, the economic infringements the Treaty of Versailles put on Germany, and the Nazi’s appealing economic policies, such as Autarky. With such a combination of economic factors all pushing for the same destructive outcome, it is imperative to look beyond the 20th century in order to find patterns through history to prove that economic causes are at the root of all international disorder.

When discussing the Wall Street Crash and its implications in bringing about World War II, it is imperative to consider how it not only devastated the American economy, but also how it sent a whirlwind of disturbance and stress throughout Europe, followed by a complete state of “weltschmerz”, or “world pain”. Succeeding World War I, countries such as France and Britain were borrowing money from America, in order to finance post-war reconstruction. By 1919, Europeans owed the United States more than $10 billion and Calvocoressi writes “...the turning off the American tap-... because of the collapse of those markets - throttled Europe’s economies”[1] In particular, depression hit Germany with particular ferocity due to its reliance on American loans, the Dawes Plan in 1924 and the Young Plan in 1929, to pay off the reparations set out in the 1919 peace treaty, the Treaty of Versailles. An estimated loan of $200 million was floated to aid German recovery, which Shirer describes as “The cornerstone of German prosperity had been from loans abroad, principally from America, and world trade.”[2] Both historians are successful in conveying the significant role America played within European economics succeeding World War I. However, Shirer overestimates the extent in which international trade sustained Germany’s economy after the Great War. This is due to European countries, like France, refusing to trade with Germany until they had received reparations in full. .This severely limited the import and export of German consumer goods and industrial raw materials. Therefore, one can see how this would increase Germany’s dependency on American credit and intensify the repercussions of the Wall Street Crash.

Robbins is in agreement with this view when writing “In Germany, the appalling shortage of capital created by the war and the post war inflation was partly compensated by large imports of capital. But the business situation was never normal, and at a much earlier date than elsewhere it became quite perilous”[3] The “perilous” consequences Robbins mentions include the massive increases in unemployment across Germany; by 1930, 22.7% of the German population was unemployed, and by 1932 this rose to 43.8%. This could be one explanation for the dramatic increase in radicalism within the Reichstag, for example, in the 1928 elections the NSDAP polled 810,000 votes and elected 12 seats to the Reichstag; in 1930 these numbers rose to a staggering 6,409,600 votes which allowed the party 107 seats in the Reichstag. Calvocoressi states “Unemployment is regarded as one of the major determinants of Nazi success”[4] This view is unopposed as it would be naive to suggest that the correlation between the rise in mass unemployment and the copious increase in votes for the National Socialist party is down to mere chance. This shows that when the population lose confidence in the quality of their democratic governing body, they will resort to more radical ideologies in an act of desperation. Stachura recognises this to be true when writing  “...they tended to radicalise towards the right , following their traditional voting habits and group norms which in better times favoured the conservatives and other right-of-centre parties.”[5] This interpretation is uncontested as there is evidence throughout history which proves that when the economy of a country is in a tenuous position, the population will demand a change. An example of this is evident in the 1848 German Revolution; when a combination of economic crisis’ including bad harvests and a decline in investments within industry led to the establishment of the Frankfurt Parliament. This displays the amount of power the population hold over their Government and it is their discontent which brings about political change. Therefore, during times of economic turmoil people are more likely to accept extremist radical ideas, such as fascism and communism, hence Hitler’s ease into the position of Chancellor in 1933. “The hard-pressed people were demanding a way out of their sorry predicament…to all the millions of discontented, Hitler in a whirlwind campaign offered what seemed to them, in their misery, some measure of hope.”[6] This interpretation holds much truth as the German people were able to overlook Hitler’s extreme xenophobia as long as his policies remedied the sad state which was the German economy after the Wall Street Crash.

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With such extensive support for Radical ideologies taking hold of the population the Weimar Republic was sentenced to fail as soon as The Great Depression hit Germany. Although Rothermund disagrees with the judgement that the Great Depression was a fundamental cause of World War II “The Depression was not the direct cause of the war but there was at least one obvious link between it and the war: the rise of Hitler”[7] However, this view can naturally be considered invalid as Hitler’s rise to power is a result of the Great Depression and therefore is an absolute direct cause. Rothermund even ...

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