Great Depression

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How did the Great Depression affect German society?

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The U.S. stock market crash of October 1929 and the subsequent Great Depression had ripple effects throughout the Western world. The impact on Germany was profound. The German economy was progressing at a moderate but steady pace in the mid/late 1920s. With the start of the Great Depression, Germany experienced a sharp drop in national income and industrial production along with a spike in unemployment.

Germany relied heavily on foreign—particularly, American—capital. After the stock market crash, the United States began to pull back capital, including loans that were furnished by the Dawes Plan (1924) and related acts in order to help the Weimar Republic (1918-1933) with reparation payments to France and Great Britain. The withdrawal of capital precipitated a banking crisis in Germany and a lasting economic recession ensued. Furthermore, the economic malaise in major western countries led to a drop in the demand for German exports, which led directly to a drop in production and growing unemployment.

The economic hardships paved the way for the appeal of radical politics and the rise of the National Socialist (Nazi) Party. The political success of the Nazis, beginning with the Reichstag elections of 1930, led to a further withdrawal of capital. As the crisis deepened and emergency measures by the Weimar government failed, more radical solutions became more appealing.

Certain social groups were particularly susceptible to the Nazi Party's message. The youth, for example, were coming of age and trying to establish their careers and families at a time when prospects for doing so were exceedingly bleak. The Nazi message, which squarely placed the blame on the Weimar Republic for all of Germany's problems, appealed to social groups (farmers, professionals, public officials) that badly wanted the crisis to end but saw Marxist socialism as a cultural threat. Anti-Weimar sentiment was strong among these groups, and the Nazis appeared to be offering a viable solution.

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