The effects of the depression on Germany

The fate of the German economy rested heavily on loans from America. When the wall street crash in 1929 happened in America diaster struck in Germany:

• Many US banks were forced to recall their loans, German companies were unable to to pay back the reparations.
• German buisnesses began to close, 6 million people were left unemployed.

Between 1928 and 1930, the rates of unemployment rose from 2.5 to 4 million.  This provided an oppurtunity for extremist groups such as the communists and Nazis.

• As employment rates rose - more people felt let down by the Weimar government and they began to support extremist groups.
• In the 1930s, the KPD (communists) increases its number of seats in the Reichstag from 54 to 77.
• In 1930, the Nazis were the second biggest power in the Reichstag - they increased from 12 seats in 1928 to 107 seats in 1930.