The Great Depression

• The Wall Street Crash Ended economic Recovery:

  -In October 1929, the Wall Street stock market in America crashed. It sparked an international economic crisis (the Great Depression) and meant the USA couldn't afford to prop up the German economy any longer

  -Germany's economic recovery between 1924 and 1929 was built on unstable foundations. The biggest problem was that it was dependent on loans from the USA, which had been agreed in the Dawes Plan 

  -After the Wall Street Crash, the USA couldn't afford to lend Germany money anymore. It also wanted some old loans to be repaid.
• The Wall Street Crash Ended economic Recovery:

  -Germany's economy collapsed without American aid. Industrial prodution went into decline-factories closed and banks went out of business. 

  -There was mass unemployment. In October 1929 1.6 million people were out of work, and by February 1932 there were over 6 million. 

  -The government also cut unemployment benefits - it couldn't afford to support the large numbers of Germans out of work.
• Extremist parties became More Popular

  -Popular discontent with the Weimar government and economic instability created an opportunity for extremist parties to grow. The KPD (the Communist Party of Germany) increased in influence.

   1) The KPD was founded in December 1918 and wanted a workers' revolution.

  The communists promised to represent workers' needs and make German society more fair.

  2) This helped the KPD to gain a lot of support from unemployed Germans during times of economic crisis. 
• Extremist parties became More Popular

  -3) When the Great Depression hit Germany in 1929, the KPD competed with the Nazi Party for the support of Germans who had been hit hard by the economic crisis.

  4) Between 1928 and 1932, membership of the KPD grew from 130,000 to almost 300,000. However, Nazi Party membership grew even more rapidly - soon the KPD got left behind.