Manalto, you are correct that North American breeders and some European breeders are breeding defects into the hind quarters but the dog in the pic does not look the way a German Shepherd aught to look either. The back should be straight and wide and the rear legs should look a little like a Z - like a wolf's instead of straight down. The word 'purebred' was used loosely by the American Kennel Club to please American breeders who were actually breeding mixes. The Canadian Kennel Club followed suit. That's the other reason for hip dysplasia. Hopefully the public will force the American and Canadian Kennel Clubs to adopt European standards for German Shepherd dogs because it's sad to lose your GSD to pain.
Nevertheless, the dog in the pic looks beautiful and the dresses of that time period are so interesting.

Today German Shepherd dogs are bred for low-slung rear hindquarters, which has created problems with hip dysplasia. It's nice to see what these dogs looked like before this defect was intentionally introduced into the breed.

The people in these old shots cannot help but look dated to us, but a good triple-coat of fur never goes out of style.