A worldwide financial panic and economic depression began with the October 1929 United States stock market crash and the May 1931 failure of the Austrian Credit-Anstalt. A credit crunch caused international bankruptcies and unemployment: 12 million jobless by 1932 in the United States, 5.6 million in Germany, 2.7 million in England. Governments responded with tariff restrictions (Smoot-Hawley Act, 1930; Ottawa Imperial Conference, 1932), which dried up world trade. Government public works programs were vitiated by deflationary budget balancing.
In Germany, years of agitation by violent extremists were brought to a head by the Depression. Nazi leader Adolf Hitler was named chancellor in Jan. 1933 and given dictatorial power by the Reichstag in March. Opposition parties were disbanded, strikes banned, and all aspects of economic, cultural, and religious life were brought under central government and Nazi party control and manipulated by sophisticated propaganda. Severe persecution of Jews began (Nuremberg Laws, Sept. 1935). Many Jews, political opponents, and others were sent to concentration camps (Dachau, 1933), where thousands died or were killed. Public works, renewed conscription (1935), arms production, and a 4-year plan (1936) all but ended unemployment. Hitler's expansionism started with reincorporation of the Saar (1935), occupation of the Rhineland (Mar. 1936), and annexation of Austria (Mar. 1938). At Munich (Sept. 1938) an indecisive Britain and France sanctioned German dismemberment of Czechoslovakia.
In Russia, urbanization and education advanced. Rapid industrialization was achieved through successive 5-year plans starting in 1928, using severe labor discipline and mass forced labor. Industry was financed by a decline in living standards and exploitation of agriculture, which was almost totally collectivized by the early 1930s (kolkhoz, collective farm; sovkhoz, state farm, often in newly worked lands). Successive purges increased the role of professionals and management at the expense of workers.................
