While what happened on February 3rd, 1936 was a long time coming in the eyes of economic analysts around the world, few expected it to have happened at this point. With the political uncertainty surrounding the assassination of Prime Minister Nikolai Nekrasov, the loss of investments in the Russian Republic was enough to put German companies in large trouble, and combined with damaging banking practices and lack of regulations caused an intensification in selling. The volume traded was so large that reports of price changes around the nation were hours late, causing further uncertainty in investors, leading to a massive run on banks. At closing on Monday, the Berlin Stock Exchange had lost roughly 24% of its values, the largest drop in history.

While bad, Black Monday was essentially a foreseen consequence of years of reckless German spending and investments. Stocks bought on margin for colonial companies and overseas investments skyrocketed coincided with the rise of Germany as the global hegemon. Hyped up market value for overseas investment caused an artificially inflated bubble that would easily be lost as soon as the realisation that the profit of the investments weren’t as good as it was made out to be, as as soon as the bubble burst, there simply isn’t enough financial capital to cover up the losses. Compounded with the fact that most of these investments were done through 3rd parties in the neutral Russian Republic, political instability caused with unfavourable return on investments causes a widespread panic.

As billions were lost and investors lose their lifetime savings, the crash should’ve only affected these groups the most. However, the bank runs were partially caused by, as mentioned, unfavourable return of investments on German overseas investments as the value was artificially hyped up, and as the revenue failed to cover up the investments made, German companies are now also forced to lay off workers not only abroad, but also domestically as a loss in capital destroyed consumer demands, making overproduction undesirable. The fact that the norm in political and economic theory regarding downturn like this was to counsel in favour of doing nothing in response doesn’t help.

With unemployment rising as companies lay off their employees, without needed measures to combat the situation a depression is likely to take hold in Germany. Abroad this has effects further than just in areas with German direct economic influences. With the 2 largest industrial powers now in turmoil, consumers abroad now find themselves unable to buy their products especially as protectionary tariffs were raised, leading to a near halt in world trade. Countries in the Syndicalist Internationale were mostly unaffected by this downturn, being rather insulated from German economic influence, now gaining a huge opportunity as even countries formerly tied economically to Germany now look to Syndicalist imports.

The crash is set to have tremendous political ramifications. In Europe, the economic downturn is likely to be spun as a failure of the Mitteleuropa project, casting doubts on German leadership within its European sphere. While having avoided economic catastrophe mostly due to circumstances rather than objectively better economic policy, the fact that the Internationale scrapped the crisis without much of a hitch signals to a large part of the world the appeal of Syndicalism as a possible alternative to the current political status quo. Reforms are called for around the world, perhaps also signaling an end, to Pax Germanica.