In 1923, money rapidly lost value. After 1929, businesses failed and unemployment rose. The later crisis helped the Nazis win voters who wanted a different government.
Keep the two crises separate. Hyperinflation means an extremely rapid rise in prices. In 1923, German money lost so much value that cash savings and fixed incomes, such as pensions that did not rise with prices, could buy far less. Some people with debts benefited because they could repay them in money worth much less. The same crisis therefore affected people differently.
The crisis grew out of wartime financial problems and worsened during the occupation of the Ruhr, an industrial region. The German government supported passive resistance: workers refused to cooperate with the occupying forces. Paying them while production was disrupted added to the financial strain, and the government financed spending by creating more money. Currency and financial reforms ended hyperinflation in late 1923; economic recovery followed. It did not continue without a break until Hitler took office.
The Great Depression began in 1929. German recovery had depended partly on foreign loans, so reduced lending and falling world trade hit businesses hard. Firms cut production or closed, and many people lost their jobs. This was a crisis of falling economic activity and unemployment, not a continuation of the 1923 price rises.
People who lost work or feared losing it could lose confidence in established parties. Nazi promises of jobs, strong leadership and national recovery then became more attractive to some voters. Others chose the Communists or kept supporting democratic parties. Economic hardship widened the Nazis' audience; their campaigning helped turn that opportunity into votes.
Worked example: From hardship to a change in votes
The Nazis won 2.6% of Reichstag votes in 1928. By July 1932, during the Depression, they were the largest party.
- A worker loses a job or a shopkeeper loses customers. Either may doubt that the existing government can improve the situation.
- A Nazi campaign promises recovery under Hitler. Some people now consider a party they would previously have rejected.
- This explains a possible link between hardship and Nazi votes. The election results do not prove that every unemployed person voted Nazi, or that hardship alone explains the change.
Watch out for this
The Great Depression began in 1923 when German money became worthless.
Hyperinflation peaked in 1923. The Depression came after 1929, following a period of recovery. Remember the main contrast: rapidly rising prices in 1923; failing businesses and mass unemployment after 1929.
Check your understanding
Which answer explains how unemployment could help Nazi support?
- Unemployment existed and Nazi votes increased.
- Insecurity made promises of recovery more attractive to some voters who had lost trust in established parties.
- Every unemployed person became a Nazi.