how did the collapsing of wall street exchange affect Germany
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Answer:
In October 1929 the Wall Street Crash on the US stock exchange brought about a global economic depression. In Europe, Germany was worst affected because American banks called in all foreign loans at very short notice. These loans, agreed under the Dawes Plan in 1924, had been the basis for Weimar’s economic recovery from the disaster of hyperinflation. The loans funded German industry and helped to pay reparations. Without these loans German industry collapsed and a depression began
- The rise in unemployment significantly raised government expenditure on unemployment insurance and other benefits.
- Germans began to lose faith in democracy and looked to extreme parties on the both the Left (the communists) and the Right (the Nazis) for quick and simple solutions.
The rise of extremism
When people are unemployed, hungry and desperate, as millions were in Germany between 1930 and 1933, they often turn to extreme political parties offering simple solutions to their problems. Between 1930 and 1933 support for the extreme right-wing Nazis and the extreme left-wing communists soared. By 1932 parties committed to the destruction of the Weimar Republic held 319 seats out of a total of 608 in the Reichstag, with many workers turning to communism. However, the real beneficiaries were the Nazis.
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