Critical Analysis of World War II and Great Depression in America and Germany

When looking into comparing and contrasting America and Germany economies during World War II and how the war affected them financially the overview of each country before the war with both countries facing tragic events with Germany with the Treaty of Versailles and America with the Great Depression that crippled both of their economy. Then during World War II each country found ways to improve and support their economy by America opening their job opportunity to women and minorities to sustain their war fighting efforts while Germany used different methods in the way of slave labors to provide the same fighting capabilities. Then finally, the aftermath of World War II provided America with a strong economy and putting itself has the richest country in the world then Germany starting form economic downfall to turn it around with the German economic miracle to becoming the third richest country after the tear down of the Berlin wall. While both America and Germany improved their economy during World War II, America focused on economic growth while Germany sought for self-gain while overtaking Europe.

The United States economy after World War I ended seemed to be on the rise until the “Great Depression” started with the stock market crashing on October 24, 1929 which was “Black Thursday” in which 16 million shares of stock was sold by scared investors due to their lost of faith in the American economy.8 This was due by America over time spending more than they earned, heavy debt and the effects of World War I. During the Great Depression workers who were lucky to keep their jobs had their wages decrease by 43% and farmers lost their homes and land due to the drastic fall of produce prices. The Great Depression effected American industry by factories closing, mills and mines abandoned that put business and labor in serious trouble. The Great Depression destroyed the United States economy by its height in 1933 a quarter of the Nation’s work force, 12,830,000 people were unemployed. American people looked at President Franklin D. Roosevelt for help which he proved with his “New Deal” program that provided some relief to the people and supported drastic changes to the federal spending, price regulation, job placement, expansion of unions, easier access to home loans, social security, and public view of restored confidence in their government.8 This program did not stop the crisis at hand but the gearing up for World War II would bring an end to the most catastrophic economic crisis in the “Great Depression”. Germany also had economic issues of their own before the war that ultimately led to the uprising of Hitler and the start of World War II. The end of World War I provided the creation of the Treaty of Versailles that named Germany at fault for the war and had the country pay for all the damages caused by the war. The amount was 132 billion gold marks which was 33 billion dollars which just destroyed the Germany economy. These led to vast unemployment, factories closing, and currency inflation. The German mark was losing its value to where a loaf of bread in the morning was 20,000 marks and by night fall it would go up to 5,000,000 marks.9 It was where workers were paid twice a day to survive. The German economic collapse happened on November 15 and it was where it took 4.2 trillion German marks to equal one single American dollar. Then the Allies agreed to help Germany with the creation of the Dawes Plan that provided short-term economic benefits towards German economy and lessen the burdens of war reparations of the Treaty of Versailles. This provided Germany the economic upswing it needed until the Great Depression. The American investors took their loans back from Germany and led to the country’s second largest insurance firm collapsed and unemployment skyrocketed to three million during the year and then reached its maximum in 1932 to six million people before World War II.9 When comparing both country’s economy before World War II both Germany and America were negatively affected by the Great Depression that caused millions of their people to be unemployed, factories to close, and increase of debt. The difference was that Germany was also greatly affected by the aftermath of World War I with the Treaty of Versailles that forced Germany to pay 132 billion gold marks for war damages that crippled their economy from the start. The start of World War II was important for these two countries to help get out of the economic struggles that they were in.

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During the start of World War II President Roosevelt wanted to keep his promise of neutrality but also wanted to help Britain against the German, he proposed the Lend-Lease Act which turn the United States economy into a wartime economy that shifted factories from the production of consumer goods towards war supplies and military vehicles.2 Then businesses started to produced plans, tanks, guns and any other military equipment needed at an unbelievable rate which in turn resulted in more jobs and more Americans back to work. Then after the tragic bombing of Pearl Harbor in 1941 the United States declare war on Germany and Japan and millions of soldiers were called to duty. These provided millions of jobs that were left due to the solders leaving for war. This provided issues by labor shortages which was picked up by previously denied workers. The workforce during World War II was made of six million women and many of them, it was their first time holding a job outside of the home. Factories open new job opportunities for African Americans. President Roosevelt made the Bracero Program that allowed Mexican laborers to temporally immigrate to the United States to work on nation’s farms due to the shortage of farmers and farm workers enlisted to the war effort.2 The shift to a wartime economy helped end the nations plague of the Great Depression and help energize the nation’s financial growth. Due to the massive production towards the military effort certain consumer goods were made scarce like gasoline, steel, coffee, oil was rationed by the means of “ration stamps” to provided people availability for these items not just the rich.3 Germany was also suffering from the effects of the Great Depression before World War 2 until Adolf Hitler took power and started providing relief by introducing different policies that target in improving the economy. These policies included tariffs on imports, and privatization of state industries. Germany also rationed its consumer goods due to the reduced foreign trade. Hitler increased Germans military spending to an unbelievable rate, by 1940 the military eventually came to represent much of the German economy. Another aspect to look at was the unemployment rate during Hitler rein which dropped from 6 million to less than 1 million in a matter of years. During World War II Germany under Hitler sustain a supply of slave labors which consist of prisoners of war and concentration camp inmates.11 When Germany took over Poland, more than 5 million citizens were used as slave labors during the war. When you look at both Germany and the United States during the war the similarities were, they both used rational methods to help their economy during the war and provided different policies and methods to get out of the Great Depression. The differences were that Germany used the countries that they conquer to improve their economy with using slave labors compare to the United States opening their jobs for women and minorities for the war effort.

The aftermath of World War II saw different economic impacts of both countries in which America saw an economic growth in which they consolidated its position as the world’s richest country. The economic growth started with the takeoff of the automobile industry, the housing boom that provided affordable mortgages, rise in defense spending due to the Cold War escalating, and fewer workers producing good and more providing services like corporate manager, teachers, salespersons. The gross national product that measures all goods and services produced jump from $200 million in 1940 to $500 million in 1960, due to the uprising of the economy many Americans considered themselves part of the middle class. The German economy due to World War 2 now lay in shambles due Hitler’s scorched-earth policy that burned or destroyed crops or any other resources that might be used by an invading enemy force.4 This reduced housing stock by 20% and lowered food production by half its level compared to the start of the war. A large percentage of Germany’s working men ages 18 – 35 were killed or crippled due to the war. The country was split into two-half one controlled by Iron Curtain and the other by the Western Allies. Then thanks to currency reform and the elimination of price control The German economic Miracle happen in which everything changed for the better by the new currency had value, black market ended, industrial production rose to 80 percent since 1936.7 Then finally when the Berlin wall came down and Germany was once reunited, Germany had the third-biggest economy in the world.

For conclusion, World War II provided economic aid and growth for both America and Germany in the time of need due to events like the Great Depression and the Treaty of Versailles that demolished both country’s economy. The after math of the was provided economic stability for both countries even if it took a while for Germany to find it footing.

References

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