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1931: Debt, Crisis, and the Rise of Hitler

Author(s):Straumann, Tobias
Reviewer(s):Wandschneider, Kirsten

Published by EH.Net (February 2023).

Tobias Straumann. 1931: Debt, Crisis, and the Rise of Hitler. Oxford: Oxford University Press, 2019. xxi + 240 pp. £12.99 (paperback), ISBN: 978-0198816195.

Reviewed for EH.Net by Kirsten Wandschneider, University of Vienna.


For many scholars interested in German history, and indeed many Germans trying to come to terms with their country’s difficult past, the question of the underlying reasons that enabled the Nazis to come to power is of central and recurring importance. In his book 1931: Debt, Crisis, and the Rise of Hitler, Tobias Straumann offers an engaging new take on the issue. Straumann sees the fundamental cause for the crisis and the rise in German extremism in the tension between the internal and external demands placed on Germany in the 1930s.

The 2010 Euro crisis with its challenges of debt and austerity and the accompanying experience of rising international extremism serve as a contemporary ‘hook’ to introduce the key themes of the book. On the one hand, Straumann paints a vivid picture of German politicians trying to uphold external agreements in the hopes of sustaining a fragile peace and trying to meet reparation demands to maintain German creditworthiness. On the other, domestic political pressures built as extremists tried to exploit any international concessions. Straumann subtly cautions that early 1930s Germany serves as a powerful lesson that might illustrate a dangerous path to autocracy today.

While many of the historical details and the economic arguments in the book, such as the German political events and the constraints and different incentives put in place by the Dawes and the Young plan, are not new, Straumann offers a fresh, engaging take on the interplay of these opposing forces.

For Straumann, the chasm between the internal and external pressures comes to life in the decision-making processes of key characters, who individually maybe tried their best but collectively failed to see the precariousness of the situation or were not powerful enough to swing the tide. Some of the historical figures illuminated in the book include the Austrian-Swiss economist and banker Felix Somary, called the ‘raven’, who predicted the German crisis with depressing clarity; Hans Schäffer, who served as state secretary in the Ministry of Finance and took copious notes of all meetings before emigrating to Sweden in 1933; and Frederic M. Sackett, who served as US ambassador to Germany from 1930-33.

In addition to the rich secondary literature on the German crisis, Straumann draws on original sources, including autobiographical texts and archival notes. While painting a somewhat sympathetic picture of the book’s main characters, who appear as pawns in a larger game of political power play and historical processes that were put in place in the immediate aftermath of WWI if not before, Straumann contextualizes but does not excuse their actions. For example, he clearly labels shifts to authoritarianism introduced by Brüning, such as the adjournment of the Reichstag in October 1930 (chapter 5).

In addition to an introduction and a conclusion, the book is organized into three main sections, aptly entitled ‘Confidence’ (chapters 1-3), ‘Indecision’ (chapters 4-6) and ‘Despair’ (chapters 7-10), which chronicle Germany’s descent into dictatorship. The first section lays the groundwork by illuminating the German economic situation at the eve of the 1930s through the eyes of Felix Somary, detailing the conditions of the Young plan and its relative changes to the preceding Dawes plan, and introducing the reader to the German domestic political environment, especially Chancellor Brüning.

While this first part of the book ends on a cautiously optimistic note, with the stabilization of German finances by the Brüning government under the Young plan, the precariousness of the situation becomes evident in the second part, with the rapidly deteriorating economic conditions in Germany and abroad and the results of the Reichstag elections of September 1930, where the Nazi party rose to the second largest party, with 18.3% of the votes (up from only 2.6% in May 1928). The Brüning minority government struggled to stabilize German finances, but the international community failed to fully grasp the looming dangers.

The last third of the book then concentrates on the active phase of the German financial crisis, beginning with the run on the Reichsmark, the hapless attempts by the United States to support Germany through the Hoover moratorium, to the collapse of the Danat Bank and the ensuing German Banking crisis, and Brüning’s increasing isolation and his desperate attempts to maneuver through the predicament. While Brüning was able to hold onto his position as chancellor until May 1932 and Hitler was installed by Hindenburg in January 1933, Straumann argues that the deteriorating economic situation was strategically exploited by, and thus continuously benefitted, Hitler and the Nazi Party. This last claim, while not inconsistent with the existing literature (for example, Galofré-Vilà, et al, 2021) is the one aspect of the book where I wish Straumann had expanded the narrative and provided more detail.

Altogether, the book provides a vivid and very readable account of the dangers that lurk when international agreements and institutions ignore the realities of domestic politics. For this reason the book is a wake-up call for today’s politicians and economic policy makers, and deserves to be read not just by economic historians but by a wider audience as well.


Galofré-Vilà, Gregori, Christopher Meissner, Martin McKee, and David Stuckler. “Austerity and the Rise of the Nazi Party.” Journal of Economic History 81(1): 81-113 (2021).


Kirsten Wandschneider teaches economic history at the University of Vienna in Austria. Her research focuses on European interwar economic policies and financial markets.

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Subject(s):Economic Planning and Policy
Economywide Country Studies and Comparative History
International and Domestic Trade and Relations
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII