This page discusses the impact that the worldwide Depression had on Weimar Germany, including its impact on support for extreme parties.

1. Effects of economic
depression

2. After the hyperinflation crisis
of 1923, Germans
understandably were worried
about any future economic
problems or shocks.
In October 1929, the USA
suffered the Wall Street Crash,
which led to the Great
Depression, causing
worldwide financial chaos.

3. The crash is traced to Black
Tuesday (October 29, 1929)
when the price of shares traded
on the US Stock Exchange (on
Wall Street) plunged.
The US economy was
devastated, and this affected the
rest of the world. Global
unemployment rose, prices fell
and foreign trade collapsed.

4. Proving the adage that ‘if the
USA sneezes, the world
catches a cold’, the effects of
America’s problems spread,
especially to Weimar Germany.
Many of the loans from US
banks which Germany received
as part of the Dawes and Young
Plans ended, thus starving
Germany of essential funding.

5. Germany’s lack of expected
funding hit both the public and
private sectors.
The German government did
little to end this. It did not want
to print more money (due to
fear of hyperinflation) and
also legal restrictions from
the Dawes and Young Plans
stopped it doing so.

6. The effects of this on Germany
were devastating, and raised
fears of another 1923-style crisis.
Falling prices meant many
businesses – including farmers –
went bankrupt.
Unemployment rose hugely; in
1932, 6 million people were
unemployed. By 1933, 1 in 3
Germans were unemployed.

7. As with all economic crises,
Germany’s problems created a
vicious circle of challenges.
Falling prices led to a lack of
investment and lower wages.
This in turn meant people had
less money to spend, which in
turn reduced demand and
spending, eventually meaning
unemployment, and so on.

8. As a result of these financial
problems, the German
government reduced public
spending.
This included less spending on
services and infrastructure
projects. It also included
welfare spending, such as a
one-third reduction in war
victims’ pensions.

9. Historians’ views
• Vladislav B. Sotirović: German economy was weak for several
reasons but economic problems were mostly a consequence of
impact and outcomes of First World War.
• William Carr: “inconceivable” that Hitler could have ever come
to power without the effects of the world economic crisis.
• Detlev Peukert: The end of the Republic did not happen
overnight and was not the product of any single set of causes.