On July 25, 1934, a group of Austrian Nazi paramilitaries, known as the Austrian SS, attempted to seize power through a coup d'état. Their goal was to overthrow Chancellor Dollfuss, a staunch opponent of the Anschluss (the annexation of Austria by Nazi Germany).
The rebels attacked the Austrian Chancellery in Vienna, where Dollfuss was located. A fierce clash ensued between government guards and the insurgents, during which the chancellor was seriously wounded. Despite being taken to a hospital, Dollfuss died of his wounds later that day.
El fracaso del golpe de estado y sus consecuencias
Although the rebels managed to temporarily seize the Foreign Ministry, the coup ultimately failed. Government forces, supported by the army, managed to suppress the rebellion and restore order.
Dollfuss's death was a severe blow to the Austrian Nazi movement. However, the event also served to consolidate the power of the authoritarian Austrian regime, which remained in power until 1938, when Austria was annexed by Nazi Germany.
Engelbert Dollfuss
Engelbert Dollfuss was an Austrian politician who served as Chancellor of Austria from 1932 until his assassination in 1934. He was a key figure in the Austrian resistance to the Anschluss and a staunch opponent of Nazism.
Dollfuss was a devout Catholic and a social conservative. He implemented authoritarian policies to maintain control of the country, which led to his criticism from his opponents. However, he is also recognized for his efforts to preserve Austria's independence in the face of the growing threat from Nazi Germany.
The importance of the event:
The assassination of Engelbert Dollfuss and the failed coup d'état of 1934 were pivotal events in Austrian history. These events marked a turning point in the power struggle between the Austrian government and the Austrian Nazi movement, and ultimately led to the annexation of Austria by Nazi Germany in 1938.
The effect on stock markets and international markets
US stocks fall 6.61% after Austrian Nazis assassinate the country's chancellor and take cabinet members hostage.
Source: New York Times
As Italy and Germany massed troops on the Austrian border, investors feared that a new world war was imminent. (Recall that the assassination of Archduke Franz Ferdinand of Austria on June 28, 1914, was the trigger for World War I.) Fortunately, tensions would dissipate, and the U.S. stock market would continue its recovery from the Great Depression low it had reached less than two years earlier.
World War II, and particularly the Nazi advance in Europe, had a profound and multifaceted impact on international financial markets. As Adolf Hitler expanded his territorial dominance, stock markets experienced extreme volatility, with investors reacting to geopolitical chaos and economic uncertainty. The outbreak of war in 1939 had already triggered a sharp decline in global markets, but the speed and force of the German advances increased the pressure. Investors feared both for Europe's economic stability and the impact of potential trade restrictions and new war policies.
A clear example of this effect was the reaction to the invasion of France in 1940. The capture of Paris and the rapid collapse of one of Europe's major powers hit the British and American markets particularly hard. In London, the FTSE index suffered historic falls due to the direct threat to the United Kingdom, while in New York, the Dow Jones reflected growing nervousness about the possibility of the United States being drawn into the conflict. Companies with international ties, especially in sectors such as banking, manufacturing, and shipping, faced significant losses.
Commodity trading was also deeply affected. Nazi control of vast resource-rich regions, such as Poland and parts of the Soviet Union, disrupted the global supply of key products like coal, steel, and oil. These shortages, combined with rationing and the redirection of resources toward the war effort, created imbalances that inflated prices and affected the economies of both Allied and neutral countries. At the same time, gold and foreign currency markets became safe havens from uncertainty, experiencing increased activity as investors sought to protect their wealth.
However, it wasn't all decline. Some sectors, such as the arms industry and companies linked to military production, saw their stock prices boom thanks to increased war spending. In the United States, the Lend-Lease program for the Allies boosted the domestic economy and began to mark the transition to a full-scale war effort, which would eventually lift the country out of the Great Depression. This demonstrates how, even in times of conflict, financial markets find ways to adapt, reflecting both the tragedies and opportunities of the moment.
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