Tango with the Devil

Abstract

This chapter discusses the political fallout from the Great Depression in central Europe. The German economy had slipped into recession even before the Wall Street crash, and the news from New York devastated the business climate even further. The Muller government was already drowning under the political burden of a burgeoning employment crisis that threatened to bankrupt the national unemployment insurance fund. Foreign Minister Gustav Stresemann of the People's Party, who had negotiated the far-reaching Young Plan of 1929 refinancing the German reparation payments over the long term and including a pledge from the Allies to evacuate their troops from the Rhineland, died just weeks before the Wall Street crash, depriving the Cabinet of its most talented statesman. Stresemann's death laid bare the impotence of the Muller Cabinet, which few expected to survive the difficult winter months.