A-1) By 1928, the economies of the world had become very interdependent on each other. Through the Dawes and young plan, Germany greatly relied on American loans to keep their economy running smoothly. When the Wall Street crash took place in 1929, it had disastrous effects on Germany as their economy was so dependent on American loans. This intern also affected Germany politically.
The impact on Germany was disastrous. The depression caused major unemployment; jobs were being lost due to all the factories and industries being shutdown. In 1930 there were two million people who were unemployed but day by day the numbers kept increasing, resulting in six million people being unemployed between 1931-1933. Apart from unemployment banks collapsed and were unwilling to give out loans, the Americans wanted their money back. The loans given to Germany by American were short termed and called in quick, quicker than they could manage to repay them.
All the economic prosperity in Germany was dying out. The Americans along with asking for their money back withdrew all their investments from Germany, this affected trade and exports. Exports fell from 630 mil pounds to 280 mil pounds causing the economy to falter even further down.
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The drastic economic affects the depression had on Germany soon began to create wavering in the government of the Weimar. Due to the horrifying rates of unemployment, jobless men were turning towards more extremist political parties like the Nazis and the communists as they had immediate solutions to the problems the current government could not fix. 55% of all working class recruits who joined the Nazi party from 1930-33 were unemployed and there were 1300 Nazi Party demonstrations during 1930, The Nazi Party benefited most from this slump. Ultimately creating substantial revival of extremism.
Austere measures taken by Bruning also resulted in the unemployed being driven towards extremist parties as he was focused on removing burdens of reparations and tackled Germany’s domestic problems with orthodox, deflationary economic tactics which reduced social service and unemployment benefits when they were needed the most. This was done to try and get the international community to cancel their debts.
Germany’s economy was suffering though the USA introduced the ‘new deal policy’ to sort out the mess they had created but to do so put them selves into economic isolation for a period of time. Other than that, the depression led to dramatic growth of influence for those parties that offered extreme solutions to contemporary problems, while playing a very important role in Hitler becoming chancellor.
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