Hitler and the Great Depression

Probably the same way the Depression ended in the U.S. after PH--the war would jumpstart their economies.
 
If Britain and France manage to oust Hitler than it will improve their economies but will leave Germany in greater ruin than before. After Hitler is either captured/killed and largely discredited and humiliated as a leader, the Communist Party gets a stronger show of support. The Weimar Republic though probably survives for at least some time after amidst the tougher economic times.

The Great Depression eases for Britain and France but the rest of Europe and the United States are still stuck in the grip of the crisis.
 
If France does some aggressive shit during the Rhineland crisis, they default on their loans and declare bankruptcy, given the financial crisis they were going through at the time.

EDIT: Also, IIRC, Hitler had given orders for a retreat in case French troops so much as crossed the border. This means there is a chance he could get away scot-free by censoring/manipulating the news in Germany, while also bankrupting France in the process.

Given the situation, France would NOT do anything more than move troops into the Rhineland, so no marching on Berlin or anything.
 
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It depends how successfully the New Deal progresses. Contrary to what your Libertarian or Conservative friends may tell you, every year of the New Deal the economy and employment situation made marked progress, except for one. GDP increased, employment increased, etc. The year that is the exception was 1937, during which time FDR took the advice to cut back the New Deal spending and balance the budget, with an eye towards the deficit. The economy went back into a tailspin in reaction, and only returned to recovery with the return of the New Deal efforts. 1937 was a year of trip ups. Alongside that boondoggle, FDR attempted the Court packing scheme, which alienated the public. What followed was the return of Conservatives to greater strength, and the Supreme Court was already Conservative, meaning New Deal programs were easy to get struck down, and would be harder to pass.

The War would prove Keynesianism. Through massive output, deficits be damned, the nation was pulled to economic strength. The New Deal would have done that, in domestic rather than military terms, but the issue is whether the New Deal would have continued in successful terms or have been chipped away at, with legislation held up by Conservatives in the Congress or killed by them or watered down by them, and with legislation and acts and organizations declared unconstitutional or partially declared unconstitutional by a Conservative Supreme Court, chipping at at its strength. Even if such a thing happened, leading to a realignment where New Dealers regained strength, that would still follow a period of years where the economy is mucked up; something that would prolong the Depression and would be a burden on the common American and on the nation.
 
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If Britain and France manage to oust Hitler than it will improve their economies but will leave Germany in greater ruin than before. After Hitler is either captured/killed and largely discredited and humiliated as a leader, the Communist Party gets a stronger show of support. The Weimar Republic though probably survives for at least some time after amidst the tougher economic times.

If anything Germany would probably end up a serious basket case as the German far right and the Heer duke it out for control. The KPD had been pretty heavily purged by 1935 and the Weimar Republic was all but dead by 1933 due to three years of rule by emergency presidential decrees. No Hitler would have been a better outcome but odds are Germany would not revert to any kind of pre-1933 status quo; it would all depend on who could command the public's loyalty and make it stick.

This would also all be under the shadow of British/French intervention which would have its own major impact. Odds are German revanchism doesn't go away, it just gets delayed with even more fuel added to the fire.
 
If anything Germany would probably end up a serious basket case as the German far right and the Heer duke it out for control. The KPD had been pretty heavily purged by 1935 and the Weimar Republic was all but dead by 1933 due to three years of rule by emergency presidential decrees. No Hitler would have been a better outcome

understatement of the year


but odds are Germany would not revert to any kind of pre-1933 status quo; it would all depend on who could command the public's loyalty and make it stick.

This would also all be under the shadow of British/French intervention which would have its own major impact. Odds are German revanchism doesn't go away, it just gets delayed with even more fuel added to the fire.

I bet the surviving loved ones of the holocaust victims would take it.
 
If France does some aggressive shit during the Rhineland crisis, they default on their loans and declare bankruptcy, given the financial crisis they were going through at the time.

EDIT: Also, IIRC, Hitler had given orders for a retreat in case French troops so much as crossed the border. This means there is a chance he could get away scot-free by censoring/manipulating the news in Germany, while also bankrupting France in the process.

Given the situation, France would NOT do anything more than move troops into the Rhineland, so no marching on Berlin or anything.

Wo is "they," that defaults, France or Germany?

I think its likely Hitler would have been overthrown, or severely weakened.

France may consider it a victory just to make the German troops leave.

I suppose it was a good thing France didn't try it:rolleyes:
 
Wo is "they," that defaults, France or Germany?

I think its likely Hitler would have been overthrown, or severely weakened.

France may consider it a victory just to make the German troops leave.

I suppose it was a good thing France didn't try it:rolleyes:


France's top military official, General Maurice Gamelin, informed the French government that the only way to remove the Germans from the Rhineland was to mobilize the French Army, which would not only be unpopular; it would also cost the French treasury 30 million francs per day.[40] Gamelin assumed a worst-case scenario in which a French move into the Rhineland would spark an all-out Franco-German war, a case which required full mobilization. Gamelin's analysis was supported by the War Minister, General Louis Maurin who told the Cabinet that it was inconceivable that France could reverse the German remilitarization without full mobilization.[41] At the same time, in late 1935-early 1936 France was gripped by a financial crisis, with the French Treasury informing the government that sufficient cash reserves to maintain the value of the franc as currently pegged by the gold standard in regard to the U.S. dollar and the British pound no longer existed, and only a huge foreign loan on the money markets of London and New York could prevent the value of the franc from experiencing a disastrous downfall.[42] Because France was on the verge of elections scheduled for the spring of 1936, devaluation of the franc, which was viewed as abhorrent by large sections of French public opinion, was rejected by the caretaker government of Premier Albert Sarraut as politically unacceptable.[42] Investor fears of a war with Germany were not conducive to raising the necessary loans to stabilize the franc: the German remilitarization of the Rhineland, by sparking fears of war, worsened the French economic crisis by causing a massive cash flow out of France as worried investors shifted their savings towards what was felt to be safer foreign markets.[43] On March 18, 1936 Wilfrid Baumgartner, the director of the Mouvement général des fonds (the French equivalent of a permanent under-secretary) reported to the government that France for all intents and purposes was bankrupt.[44] Only by desperate arm-twisting from the major French financial institutions did Baumgartner manage to obtain enough in the way of short-term loans to prevent France from defaulting on her debts and keeping the value of the franc from sliding too far, in March 1936.[44] Given the financial crisis, the French government feared that there were insufficient funds to cover the costs of mobilization, and that a full-blown war scare caused by mobilization would only exacerbate the financial crisis.[44]

Even if they don't go to full mobilization, aggressive action is going to spark a capital flight and raise interest rates through the roof, meaning good Wilfrid there won't be able to secure even those short-term loans.

So, it would go something like this:

step 1. Hitler sends troops into the Rhineland
step 2. The French start mobilizing, forward French units move into the Rhineland
step 3. Hitler immediately orders a pull-back and censors all news of the event
step 4. France goes bankrupt
step 5. French Government falls, majors strikes in the cities, demobilization
step 6. Hitler sends his forces back in

And so you're back to the OTL result of a nazy Rhineland, only now you have also bankrupted the French :p
 
It depends how successfully the New Deal progresses. Contrary to what your Libertarian or Conservative friends may tell you, every year of the New Deal the economy and employment situation made marked progress, except for one.

The New Deal was a very mixed bag, and much of what you say is highly debateable. The good things that came out of the New Deal was Glass-Steagall, the SEC, and some other regulatory agencies. The various alphabet agencies that served to temporarily boost employment during election cycles had a negligible economic effect, but helped end some of the political risk in the country due to their propaganda effect. The NRA and FDR's weird attempts to set the price of gold had a negative impact to the economy. Some of the New Deal policies might have been good short term, but had long term harm.


Outside of the New Deal, FDR had a devastating effect on the economy by refusing to cooperate with Hoover during the time between the election and inauguration. FDR's refusal to work with Hoover on prepared statements and policies to end a panic in early 1933 ended the recovery that had already begun in the second half of 1932 (far too late to save Hoover). This refusal was done for the most selfish of political reasons (FDR did not want to be associated in anyway with Hoover) and hurt the country. Every other industrial country began to recover from the Depression starting from July 1932. However, only the United States relapsed back into Depression during the winter of 1932 and 1933. There is no reason why this had to happen other than FDR's refusal to cooperate with Hoover which introduced uncertainty into the election.

GDP increased, employment increased, etc. The year that is the exception was 1937, during which time FDR took the advice to cut back the New Deal spending and balance the budget, with an eye towards the deficit. The economy went back into a tailspin in reaction, and only returned to recovery with the return of the New Deal efforts.

Stating that economic activity went up every year of the New Deal doesn't mean the New Deal worked. Economic activity always goes up after panics end. The question is whether the New Deal substantially increased recovery, and here the evidence is much more circumspect. The fact is that recovery from the depths of 1932 was far slower than in previous panics or future recessions.


The War would prove Keynesianism. Through massive output, deficits be damned, the nation was pulled to economic strength.

If the war proved Keynesiasm, then why did the US economy continue to do well after the war when the federal budget was slashed as the armed forces demobilized?

Furthermore, while it is true that Federal spending went up to buy all those tanks, planes, and weapons, the total debt of the United States did not go up at all due to forced austerity on citizens and businesses. While the Federal debt to GDP ratio in 1945 was at 125%, the total debt (private and public) was at 190% which was lower than the 210% in 1938. Household debt declined from 60% percent of GDP in 1938 to 20% in 1945. Business debt declined from 90% to 40% in the same period.

In total, as a result of forced savings during the war (because people were unable to buy lots of things and saved most of their money in either bank accounts or war bonds), private sector leverage went from 150% to 60% of national income. In a very real sense, the war industry did not have a Keynesian effect at all. War purchases simply replaced ordinary purchases that would have been made, but couldn't because of wartime austerity. It was a wash.

Now obviously putting all those people to work (on the war production lines or in uniform) had an effect, but it was probably the improvement in everyone's financial shape that enabled the country to do well after war as the Federal government scaled back its debt from 125% of GDP in 1945 to under 80% in 1950 under Truman (and even more under Eisenhower and Kennedy). This isn't exactly Keynesiasm which is supposed to be a stimulus in addition to normal consumer and business spending. It's more like austerity.

The New Deal would have done that, in domestic rather than military terms, but the issue is whether the New Deal would have continued in successful terms or have been chipped away at, with legislation held up by Conservatives in the Congress or killed by them or watered down by them, and with legislation and acts and organizations declared unconstitutional or partially declared unconstitutional by a Conservative Supreme Court, chipping at at its strength. Even if such a thing happened, leading to a realignment where New Dealers regained strength, that would still follow a period of years where the economy is mucked up; something that would prolong the Depression and would be a burden on the common American and on the nation.

The New Deal could never have achieved the success of the war time measures for various reasons. The first is that unlike wartime personal austerity, people would not have been willing to sacrifice so much personal consumption that their balance sheet would improve with huge, forced savings. The second is that it would have been impossible for FDR or anyone else to spend the amount of money the government did during the war.

Given that other industrial economies recovered during the 1930s while New Deal USA did not recover as much, but that the economy was generally improving throughout the 1930s, we'd probably see continued gradual improvement throughout the 1940s until the nation's balance sheets gradually recovered on their own as the credit boom debts of WWI and the 1920s were paid off. There'd continue to be relatively high unemployments in the US that continued to gradually decline, but you also wouldn't have almost half a million dead.
 
If France does some aggressive shit during the Rhineland crisis, they default on their loans and declare bankruptcy, given the financial crisis they were going through at the time.

Didn't the French have one of the world's largest gold reserves during the Depression?
 
Didn't the French have one of the world's largest gold reserves during the Depression?

There was a a gold reserve in mid 1940, when France fell. I have heard that two warships transported gold bullion to a Toronto depository in March 1940, to serve as security for the purchases the French government was making in the US (including projected orders for 3,000+ aircraft). In June/July a small group of French warships at Martinique (including the aircraft transport Bearn) was the subject of British interest due to the gold bullion allegedly aboard. Finally there are claims the French (Vichy government) managed to move its gold reserve to the Dakar area sometime in late 1940.

The important point suggesting the existance of a gold reserve of some size is the French government was not seeking large scale loans in 1939-40 to fiance its war expenses. If the information I've seen is correct then the French gov. was not contemplating using loans to finance war costs until 1942 or perhaps late 1941.

How that fits into the French financial situation of 1936 I cant say. Perhaps gold reserves were not enough to prevent financial distress in 1936?
 

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There was a a gold reserve in mid 1940, when France fell. I have heard that two warships transported gold bullion to a Toronto depository in March 1940, to serve as security for the purchases the French government was making in the US (including projected orders for 3,000+ aircraft). In June/July a small group of French warships at Martinique (including the aircraft transport Bearn) was the subject of British interest due to the gold bullion allegedly aboard. Finally there are claims the French (Vichy government) managed to move its gold reserve to the Dakar area sometime in late 1940.

The important point suggesting the existance of a gold reserve of some size is the French government was not seeking large scale loans in 1939-40 to fiance its war expenses. If the information I've seen is correct then the French gov. was not contemplating using loans to finance war costs until 1942 or perhaps late 1941.

How that fits into the French financial situation of 1936 I cant say. Perhaps gold reserves were not enough to prevent financial distress in 1936?

Wasn't France on the gold standard at the time, which meant that selling off their gold or mortgaging it would devalue their currency and cause a major series of other issues?
http://www.voxeu.org/article/did-france-cause-great-depression


Yep:
http://isites.harvard.edu/fs/docs/i... 27 - Trade Money and Finance/Eichengreen.pdf

France cleaved to its gold standard and was only in 1936 finally starting to think about abandoning it; but they weren't yet ready to devalue their currency by selling off their large gold stocks or free floating their currency, so they refused to act to avoid having to touch their gold.
 
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