chapter  7
Totalitarian regime: Nazi Germany
Pages 19

The immediate condition that led to the collapse of the Weimar Republic and the rise of Hitler was the Great Crash of October 1929. The consequent rise in unemployment, which reached 5 million by the winter of 1930-31, put intolerable pressures on the new system of unemployment pay and strains on the Great Coalition Government (Balfour 1992: 49). On 27 March 1930, Chancellor Müller, Social Democrat and head of the five-party coalition government, resigned over reform of the unemployment insurance.1 Brüning (Centre Party) was given the task of forming a new government. In an effort to solve the economic problems he embarked on a policy of deflating the economy through cutting expenditure and wages in an effort to balance the budget, with the longer term aim of reviving foreign investment in the German economy. Following the high inflation of 1918-24, a reflationary policy looked dangerous but in practice the deflationary policy reintroduced the harsh conditions of those years. Political crisis ensued and in July 1930 President Hindenburg invoked Article 48 of the constitution, the provision for emergencies under which rule became by presidential decree.