A Decade of Economic Crisis

Hamburg's economy had been badly affected by World War I. After the war, the city's key industries, shipping and maritime trade, were subjected to severe restrictions under the armistice of 1918 and the 1919 Treaty of Versailles. Coastal towns were required to hand over the majority of their merchant fleets, and their trading links overseas were suspended. Manufacturing was hit especially hard, since there were no deliveries of raw materials or coal. Nonetheless, Hamburg’s shipping companies used their foreign exchange profits from the dramatic devaluation of the German currency during the postwar years to build up new fleets. Hyperinflation in 1923 brought an end to that positive trend, as money reserves evaporated and companies folded. Food prices rose sharply, giving rise to unrest that threatened the young republic. It took the currency reform of late 1923 to allow a return to regular economic activity.

Given its good links with the United States and England, Hamburg had access to capital on favorable terms. The city therefore benefited more than the rest of Germany from economic recovery during the second half of the 1920s. Shipping lines, in particular HAPAG, operated very successfully, generating jobs for Hamburg's shipbuilders. Big companies in the tobacco industry, insurance and engineering also date from this period. But blue-collar workers only reached their prewar wage levels by 1927 and white-collar workers by 1929.

This period of relative stability came to an end in the world economic slump during winter 1929-30. As global prices collapsed and exports shrunk, Hamburg reeled. Shipping companies took ships out of service, companies went bankrupt, and the city's welfare expenditure spiraled out of control. By 1932, unemployment was almost 40 percent, and political radicalism returned.


Hamburg in the 20th.century (1)
-    Imperial Germany and the Struggle for Voting Rights
-    Life in Wilhelmine Germany
-    The Mobile City
-    International Port and Economic Center
-    Revolution in Hamburg
-    Democracy and its Enemies
-    A Decade of Economic Crisis
-    Greater Hamburg
-    Life Under the Swastika
-    The Abolition of Democracy
-    Towards a War Economy
-    Persecution and resistance in the National Socialist state
-    Hamburg at war
-    Destruction by Fire Storm

Hamburg in the 20th.century (2)