Historical Context

1930 - 1933 the end of of the Weimar Republic

The onset of the depression in the United States of America produced a severe economic shock in Germany and was further made worse by the bankruptcy of the Austrian Creditanstalt bank. Germany's fragile economy had been sustained by the granting of loans through the Dawes Plan in 1924 and the Young Plan (1929). When American banks withdrew their line of credit to German companies, the onset of severe unemployment could not be abated by conventional economic measures. Unemployment thereafter grew dramatically, at 4 million in 1930, and in September 1930 a political earthquake shook the republic to its foundations. The Nazi Party (NSDAP) entered the Reichstag with 19% of the popular vote and made the unstable coalition system by which every chancellor had governed increasingly unworkable. The last years of the Weimar Republic was marred by even more systemic political instability than in the previous years as political violence increased. Four Chancellors Brüning, Papen, Schleicher and, from 30 January to 23 March 1933, Hitler governed through presidential decree rather than through parliamentary consultation. This effectively rendered parliament as a means of enforcing constitutional checks and balances powerless.

Brüning's policy of deflation 1930–1932

On 29 March 1930, after months of lobbying by General Kurt von Schleicher on behalf of the military, the finance expert Heinrich Brüning was appointed as Müller's successor by Reichspräsident Paul von Hindenburg. The new government was expected to lead a political shift towards conservatism.

As Brüning had no majority support in the Reichstag, he became, through the use of the emergency powers granted to the Reichspräsident (Article 48) by the constitution, the first Weimar chancellor to operate independently of parliament. This made him dependent on the Reichspräsident, Hindenburg.  After a bill to reform the Reich's finances was opposed by the Reichstag, it was made an emergency decree by Hindenburg. On 18 July, as a result of opposition from the SPD, KPD, DNVP and the small contingent of NSDAPmembers, the Reichstag again rejected the bill by a slim margin. Immediately afterward, Brüning submitted the president's decree that the Reichstag be dissolved. The consequent general election on 14 September resulted in an enormous political shift within the Reichstag: 18.3% of the vote went to the NSDAP, five times the percentage won in 1928. As a result, it was no longer possible to form a pro-republican majority, not even with a grand coalition that excluded the KPD, DNVP and NSDAP. This encouraged an escalation in the number of public demonstrations and instances of paramilitary violence organised by the NSDAP.

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Between 1930 and 1932, Brüning tried to reform the Weimar Republic without a parliamentary majority, governing, when necessary, through the President's emergency decrees. In line with the contemporary economic theory (subsequently termed "leave-it-alone liquidationism"), he enacted a draconian policy of deflation and drastically cutting state expenditure.[5] Among other measures, he completely halted all public grants to the obligatory unemployment insurance introduced in 1927, resulting in workers making higher contributions and fewer benefits for the unemployed. Benefits for the sick, invalid and pensioners were also reduced sharply.[54] Additional difficulties were caused by the different deflationary policies pursued by Brüning and the Reichsbank, Germany's central bank. In mid-1931, the United Kingdom abandoned the gold standard and about 30 countries (the sterling bloc) devalued their currencies, making their goods around 20% cheaper than those produced by Germany.  As the Young Plan did not allow a devaluation of the Reichsmark, Brüning triggered a deflationary internal devaluation by forcing the economy to reduce prices, rents, salaries and wages by 20%. Debate continues as to whether this policy was without alternative: some argue that the Allies would not in any circumstances have allowed a devaluation of the Reichsmark, while others point to the Hoover Moratorium as a sign that the Allies understood that the situation had changed fundamentally and further German reparation payments were impossible. Brüning expected that the policy of deflation would temporarily worsen the economic situation before it began to improve, quickly increasing the German economy's competitiveness and then restoring its creditworthiness. His long-term view was that deflation would, in any case, be the best way to help the economy. His primary goal was to remove Germany's reparation payments by convincing the Allies that they could no longer be paid.  Anton Erkelenz, chairman of the German Democratic Party and a contemporary critic of Brüning, famously said that the policy of deflation is:

A rightful attempt to release Germany from the grip of reparation payments, but in reality it meant nothing else than committing suicide because of fearing death. The deflation policy causes much more damage than the reparation payments of 20 years. 

In 1933, the American economist Irving Fisher developed the theory of debt deflation. He explained that a deflation causes a decline of profits, asset prices and a still greater decline in the net worth of businesses. Even healthy companies, therefore, may appear over-indebted and facing bankruptcy.  The consensus today is that Brüning's policies exacerbated the German economic crisis and the population's growing frustration with democracy, contributing enormously to the increase in support for Hitler's NSDAP.

Most German capitalists and landowners originally supported the conservative experiment more from the belief that conservatives would best serve their interests rather than any particular liking for Brüning. As more of the working and middle classes turned against Brüning, however, more of the capitalists and landowners declared themselves in favour of his opponents Hitler and Hugenberg. By late 1931, the conservative movement was dead and Hindenburg and the Reichswehr had begun to contemplate dropping Brüning in favour of accommodating Hugenberg and Hitler. Although Hindenburg disliked Hugenberg and despised Hitler, he was no less a supporter of the sort of anti-democratic counter-revolution that the DNVP and NSDAP represented.In April 1932, Brüning had actively supported Hindenburg's successful campaign against Hitler for re-election as Reichspräsident; five weeks later, on 20 May 1932, he had lost Hindenburg's support and duly resigned as Reichskanzler.

Papen deal

Hindenburg then appointed Franz von Papen as new Reichskanzler. Papen lifted the ban on the NSDAP's SA paramilitary, imposed after the street riots, in an unsuccessful attempt to secure the backing of Hitler.

Papen was closely associated with the industrialist and land-owning classes and pursued an extremely conservative policy along Hindenburg's lines. He appointed as Reichswehr Minister Kurt von Schleicher, and all the members of the new cabinet were of the same political opinion as Hindenburg. The government was expected to assure itself of the co-operation of Hitler. Since the republicans were not yet ready to take action, the Communists did not want to support the republic and the conservatives had shot their political bolt, Hitler and Hugenberg were certain to achieve power.

Elections of July 1932

Because most parties opposed the new government, Papen had the Reichstag dissolved and called for new elections. The general elections on 31 July 1932 yielded major gains for the Communists, and for the Nazis, who won 37.3% of the vote—their high-water mark in a free election. The Nazi party then supplanted the Social Democrats as the largest party in the Reichstag, although it did not gain a majority.

The immediate question was what part the now large Nazi Party would play in the Government of the country. The party owed its huge increase to growing support from middle-class people, whose traditional parties were swallowed up by the Nazi Party. The millions of radical adherents at first forced the Party towards the Left. They wanted a renewed Germany and a new organisation of German society. The left of the Nazi party strove desperately against any drift into the train of such capitalist and feudal reactionaries. Therefore, Hitler refused ministry under Papen, and demanded the chancellorship for himself, but was rejected by Hindenburg on 13 August 1932. There was still no majority in the Reichstag for any government; as a result, the Reichstag was dissolved and elections took place once more in the hope that a stable majority would result.[citation needed]

Schleicher cabinet

The 6 November 1932 elections yielded 33% for the Nazis, Two million voters fewer than in the previous election. Franz von Papen stepped down and was succeeded as Chancellor (Reichskanzler) by General Kurt von Schleicher on 3 December. Schleicher, a retired army officer, had developed in an atmosphere of semi-obscurity and intrigue that encompassed the Republican military policy. He had for years been in the camp of those supporting the Conservative counter-revolution. Schleicher's bold and unsuccessful plan was to build a majority in the Reichstag by uniting the trade unionist left wings of the various parties, including that of the Nazis led by Gregor Strasser. This policy did not prove successful either.

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In this brief Presidential Dictatorship intermission, Schleicher assumed the role of "Socialist General" and entered into relations with the Christian Trade Unions, the relatively left of the Nazi party, and even with the Social Democrats. Schleicher planned for a sort of labour government under his Generalship. But the Reichswehr officers were not prepared for this, the working class had a natural distrust of their future allies, and the great capitalists and landowners also did not like the plans.

Hitler learned from Papen that the general had not received from Hindenburg the authority to abolish the Reichstag parliament, whereas any majority of seats did. The cabinet (under a previous interpretation of Article 48) ruled without a sitting Reichstag, which could vote only for its own dissolution. Hitler also learned that all past crippling Nazi debts were to be relieved by German big business.

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On 22 January, Hitler's efforts to persuade Oskar von Hindenburg, the President's son and confidant, included threats to bring criminal charges over estate taxation irregularities at the President's Neudeck estate; although 5,000 acres (20 km2) extra were soon allotted to Hindenburg's property. Outmaneuvered by Papen and Hitler on plans for the new cabinet, and having lost Hindenburg's confidence, Schleicher asked for new elections. On 28 January, Papen described Hitler to Paul von Hindenburg as only a minority part of an alternative, Papen-arranged government. The four great political movements, the SPD, Communists, Centre, and the Nazis were in opposition.

On 29 January, Hitler and Papen thwarted a last-minute threat of an officially sanctioned Reichswehr takeover, and on 30 January 1933 Hindenburg accepted the new Papen-Nationalist-Hitler coalition, with the Nazis holding only three of eleven Cabinet seats: Hitler as Chancellor, Wilhelm Frick as Minister of the Interior and Hermann Göring as Minister Without Portfolio. Later that day, the first cabinet meeting was attended by only two political parties, representing a minority in the Reichstag: The Nazis and the German National People's Party (DNVP), led by Alfred Hugenberg, with 196 and 52 seats respectively. Eyeing the Catholic Centre Party's 70 (plus 20 BVP) seats, Hitler refused their leader's demands for constitutional "concessions" (amounting to protection) and planned for dissolution of the Reichstag.

Hindenburg, despite his misgivings about the Nazis' goals and about Hitler as a personality, reluctantly agreed to Papen's theory that, with Nazi popular support on the wane, Hitler could now be controlled as Chancellor. This date, dubbed by the Nazis as the Machtergreifung (seizure of power), is commonly seen as the beginning of Nazi Germany.

End of the Weimar Republic

Hitler was sworn in as Chancellor on the morning of 30 January 1933 in what some observers later described as a brief and indifferent ceremony. By early February, a mere week after Hitler's assumption of the chancellorship, the government had begun to clamp down on the opposition. Meetings of the left-wing parties were banned and even some of the moderate parties found their members threatened and assaulted. Measures with an appearance of legality suppressed the Communist Party in mid-February and included the plainly illegal arrests of Reichstag deputies.

The Reichstag fire on 27 February was blamed by Hitler's government on the Communists. Hitler used the ensuing state of emergency to obtain the presidential assent of Hindenburg to issue the Reichstag Fire Decree the following day. The decree invoked Article 48 of the Weimar Constitution and "indefinitely suspended" a number of constitutional protections of civil liberties, allowing the Nazi government to take swift action against political meetings, arresting and killing the Communists.

Hitler and the Nazis exploited the German state's broadcasting and aviation facilities in a massive attempt to sway the electorate, but this election yielded a scant majority of 16 seats for the coalition. At the Reichstag elections, which took place on 5 March 1933, the NSDAP obtained 17 million votes. The Communist, Social Democrat and Catholic Centre votes stood firm. This was the last multi-party election of the Weimar Republic and the last multi-party all-German election for 57 years.

Hitler addressed disparate interest groups, stressing the necessity for a definitive solution to the perpetual instability of the Weimar Republic. He now blamed Germany's problems on the Communists, even threatening their lives on 3 March. Former Chancellor Heinrich Brüning proclaimed that his Centre Party would resist any constitutional change and appealed to the President for an investigation of the Reichstag fire. Hitler's successful plan was to induce what remained of the now Communist-depleted Reichstag to grant him, and the Government, the authority to issue decrees with the force of law. The hitherto Presidential Dictatorship hereby was to give itself a new legal form.

On 15 March, the first cabinet meeting was attended by the two coalition parties, representing a minority in the Reichstag: The Nazis and the DNVP led by Alfred Hugenberg (288 + 52 seats). According to the Nuremberg Trials, this cabinet meeting's first order of business was how at last to achieve the complete counter-revolution by means of the constitutionally allowed Enabling Act, requiring a 66% parliamentary majority. This Act would, and did, lead Hitler and the NSDAP toward his goal of unfettered dictatorial powers.