An unintended effect of the anti-Young Plan campaign was to give widespread public exposure to Hitler, who used his access to the Hugenberg-owned press empire and to its weekly movie newsreels to give himself and his Nazi movement national publicity. An additional assist to Hitler’s career came on October 29, 1929, with the stock market crash on Wall Street, an event that signaled the onset of what quickly became a worldwide depression. The crash had an immediate effect in Germany as American investors, anxious about their financial position, began withdrawing their loans to Germany. German indebtedness to these investors had by 1929 reached nearly 15 billion marks. Prices on the German stock exchanges fell drastically during the last month of the year. Business failures multiplied. Early in 1930 Germany’s second largest insurance firm collapsed. Unemployment rose to three million during the course of the year. By the winter of 1932 it reached six million. Germany’s industry was working at no more than 50 percent of its capacity, and the volume of German foreign trade fell by two-thirds between 1929 and 1932.
The first critically important political effect of the economic crisis came in March 1930 when the government coalition fell apart over the rising cost of maintaining the unemployment program adopted in 1927. The Social Democratic Party, representing labour, and the Peoples’ Party, representing business, were unable to agree on the size of the government’s contribution to the fund, and their coalition dissolved. When a new coalition could not be formed, parliamentary democracy in Germany came to an end.
Political instability forced President Hindenburg to invoke his emergency powers (Article 48), which he used to appoint Heinrich Brüning of the Catholic Centre Party as chancellor. For the next two years, until May 30, 1932, Brüning governed without a parliamentary majority, deriving his authority from the powers residing in the office of President Hindenburg. However well-intentioned, Brüning’s deflationary economic policies were unable to stem the tide either of the depression or of its social and political ravages. His fateful decision to call for Reichstag elections in September 1930, moreover, inadvertently opened the door for the enemies of Weimar democracy. Together the Nazis and Communists gained nearly one of every three votes cast. In comparison to 1928, the Nazis increased their share of the vote sevenfold to 18 percent, while the Communists won 13 percent, a slight gain from their 10 percent share.
Although bitterly opposed to each other, during the next two years the Nazis and Communists succeeded in mobilizing the political and economic resentments generated by the depression. Hitler’s charismatic appeal and the youthful energies of his movement were attractive to large segments of a populace fearful of being ruined by economic and social disaster. Hitler’s record as a war veteran lent authority to the hypernationalism he expressed in racist terms. His identification of the Jew as the enemy responsible for all of Germany’s ills, be it the defeat of 1918, the Treaty of Versailles, the reparations, the inflation, or now the depression, seemed plausible to many eager to find a scapegoat. The power of Hitler’s appeal was reflected in the party’s growing membership lists—from 170,000 members in 1929 to 1,378,000 in 1932—and in the swelling ranks of the Nazi Party’s paramilitary SA (Sturmabteilung), the infamous storm troopers.
Unlike Hitler, the Communists found it difficult to extend their support beyond the German working classes. Moreover, Stalin’s increasing control over the Communists limited their political flexibility. Nonetheless, their self-confidence rose substantially because the depression seemingly confirmed their prediction of the inevitable collapse of capitalism. To the Communists, Hitler and National Socialism were perceived merely as products of the last phase of capitalism.
The depression reached its depths in the winter of 1931–32. Unemployment was still rising; the succession of business failures resembled rows of falling dominoes. Brüning, helpless in the face of these problems, was dubbed “the hunger chancellor” by his critics. Some hope of breaking the political impasse came with the series of critical state legislative elections scheduled for the spring of 1932 and with the presidential election required at the expiration of Hindenburg’s first term. Hitler’s opponents recognized that the 84-year-old Hindenburg, now fading into senility, was their only hope to prevent Hitler from winning the presidency, and, with great difficulty, they convinced Hindenburg, who wanted to retire, to seek a second term. The year 1932 was to be one of continuous election campaigning.
Although Hindenburg was eventually reelected, a runoff was necessary, and Hitler won 37 percent of the popular vote. His larger aim, however, had been to make himself the leading, or only, candidate for Brüning’s position as chancellor. Hindenburg did choose to replace Brüning in May 1932 but named the political dilettante Franz von Papen rather than Hitler. Desperate to find a base in parliament, Papen called for Reichstag elections in July. The result was a disaster for Papen and another triumph for the Nazis, who took 37 percent of the vote, the largest total they were ever to acquire in a free election. The Communists won 15 percent of the vote. Thus the two parties dedicated to destroying German democracy held a majority in the Reichstag. Still, Hitler was not appointed chancellor. In November Papen called for another Reichstag election in the hope of gaining parliamentary backing. Again he failed, although the Nazi vote fell by 4 percent. By contrast, the Communist vote rose to nearly 17 percent. In early December, when Hindenburg decided to replace Papen, he again ignored Hitler, choosing instead a friend from the army, General Kurt von Schleicher.
In the Nazi camp there was bitter frustration at the end of 1932. The party was deeply in debt and demoralized by the year’s endless campaigning. Putschist elements in the party, never persuaded that elections could bring the party to power, were growing increasingly restive. So deep was the frustration that on December 7 Gregor Strasser, second only to Hitler in the party, broke with the Nazis and retired from politics.
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