SPIEGEL SPECIAL story 1/2008
In October, 1929 tore the financial crisis on Wall Street, the global economy into the abyss. The Weimar Republic was hit hard by the shock. But only the deflationary policy of the Briining government proved fatal to Germany - and paved the way for Adolf Hitler.
The morning was different than any other day Winston Churchill had ever experienced. His Majesty's later prime minister, who had stopped off on an America trip to New York, looked out of his room at the luxury hotel Savoy Plaza to Fifth Avenue. Passersby crowded in, firefighters hurried up, but they had come too late.
"Directly under my window, a gentleman had plunged 15 stories down," Churchill reported of the incident in the early hours of October 25, 1929. The man who jumped to his death that Friday was one of the unfortunate ones who did it first Lost their fortune and then their nerves. Churchill later accepted an invitation to Wall Street. He took a seat in the visitors' gallery at the stock exchange, where he made his second borderline experience that day. He witnessed a financial crisis the likes of which the world had never seen.
Prices fell and fell and fell, the ticker rattled ceaselessly, the paper tape couldn't spit out the prices as quickly as they fell. The traders stood helpless on the floor, they looked "like the slow-motion shot of a startled anthill," said Churchill, describing what he could see from the gallery.
The day before, the sell-off had started to roll. Only individual papers lost their value, and then the movement swelled to mass flight. Every dealer just wanted to get out of the market, no matter what the price.
On Monday, the decline continued, on Tuesday, prices plummeted: around 16,4 million shares were sold off on that day, a record that lasted almost 40 years. Existence was destroyed, dreams were burst. Most of what had been piled up on paper assets in the years before had been blown away by the storm on Wall Street.
"Few people ever lost their reputation as quickly," later summed up the economist John Kenneth Galbraith, "like the bankers of New York in the five days from October 24th to 29th."
Churchill's visit to the United States ended a day later and the statesman took the ship back to England. It was, as it were, the dawn of another time. The stock market crash of 1929 was the prelude to the first world economic crisis that actually deserves its name; their foothills could be felt as far as Japan and Australia. It has not only ruined countless people and companies, it has changed the course of the world - and especially what is happening in Germany. The “Third Reich”, the Second World War, the division of the country: none of this would have been possible without the global economic crisis.
The full article by Alexander Jung can be found here: https://www.spiegel.de/spiegel/spiegelspecialgeschichte/d-55573686.html