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Effects of Wall Street Crash of 1929 on Germany
Economic and Political Effects
When the stock market collapsed on Wall Street on Tuesday, 29th October,
1929, it sent financial markets worldwide into a tailspin with disastrous effects.
"When America sneezes, the world catches a cold."
The German economy was especially vulnerable since it was built out of
foreign capital, mostly loans from America (Germany had accumulated 25.5
billion marks worth of loans by 1929!) and was very dependent on foreign
"The economic position flourishing on the surface (wallpapering over the
cracks). Germany is in fact dancing on a volcano. If the short-term credits are
called, a large section of our economy would collapse." Stresemann
Germany was so dependent on America's loans that the after-math of the Wall
Street Crash was drastic.
$ America loans and investments halts.
$ America demands previous loans are paid back. After the Wall Street Crash, America gave
Germany 90 days to start to re-pay loaned money.
$ Worldwide, countries stopped importing. Therefore Germany could no longer benefit from
$ Exports fell by 55%.
$ Unemployment rose to 5.6 million (compared to 1.8 million in 1929). By 1932, 1 in every 3
German workers is unemployed. Many Germans desperate for work, "I'd have supported the
Devil if he'd given me work."
$ Industrial production declines. By 1932, it has fallen 42% of its 1929 level and 50,000
$ Agriculture declines even further. Many farms lost. The German farmers still recovering from
"grain-glut" of 1922, further misery.
$ Five banks collapse in 1931 savings lost again much like the war bonds during the
Kaiserreich. 50,000 businesses bankrupted.
Once again hardship and misery faced the German people.
Industrial workers were unemployed and faced the future living on inadequate state
Middle classes suffer as demand for their professions or products cease,
In agriculture/the countryside, the misery deepens. There is widespread rural poverty. Many
farmers are evicted from their homes.
· Although other countries suffered from the Wall Street Crash, their governments were well
established and could survive the crisis. However, the Weimar Government, were not strong and did
not have the fundamental faith of the people necessary to endure such hardship.
· The Great Depression which followed the Wall Street Crash was a blow to the Weimar Democracy.
Germany's economy was still weak and never fully recovered from the war. Also, democracy was not
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Germany. Thus Germans blamed it for every hardship endured under its regime
(Uprisings, Putsches, Hyper-inflation crisis 1923, Wall Street Crash 1929 and The Great Depression).…read more