Question

What was the Great Depression and it’s effects on Germany

Answer 1

The German economy was the worst hit by the economic crisis. By 1932, industrial production was reduced to 40 per cent of the 1929 level. Workers lost their jobs or were paid reduced wages. The number of unemployed touched an unprecedented 6 million. On the streets of Germany you could see men with placards around their necks saying, ‘Willing to do any work’. Unemployed youths played cards or simply sat at street corners, or desperately queued up at the local employment exchange. As jobs disappeared, the youth took to criminal activities and total despair became commonplace. The economic crisis created deep anxieties and fears in people. The middle classes, especially salaried employees and pensioners, saw their savings diminish when the currency lost its value.
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Answer 2

In 1923, France occupied the Ruhr Valley, the heartland of German industry, because Germany was unable to pay war reparations demanded by the Treaty of Versailles. The new Weimar Chancellor (like president) or Prime Minister succeeded in getting France to withdraw, and America loaned Germany money to stabilize the German economy.

The economic situation in Germany briefly improved between 1924-1929. However, Germany in the 1920s remained politically and economically unstable. The Weimar democracy could not withstand the disastrous Great Depression of 1929.

The disaster began in the United States of America, the leading economy in the world. The American stock exchange is in the city of New York in a building on Wall Street. The Wall Street stock exchange collapsed in 1929 and the American economy collapsed with it. This event was known as the Wall Street Crash, and was the start of the Great Depression.

The Great Depression affected all capitalist economies in the world. American banks immediately withdrew the loans they had made to Germany. Businesses closed, unemployment rose and inflation was rampant. German money had so little value, that it might take a wheelbarrow full of notes to buy a few groceries!