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How did the Great Depression affect Germany?

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The Weimar Republic was established to govern Germany after its defeat in World War I (1914–1918). It ruled the nation from 1919 to 1933. The Weimar Republic faced numerous and severe problems during its history, and the Great Depression proved to be its deathblow.

Communists attempted to seize power by force in 1919. A brief civil war followed as right-wing forces fought communists in the streets. The army put down the communist revolt and killed its leaders.

Street violence was not the only problem facing the Weimar Republic. The new German government was forced to sign the Versailles Treaty after WWI. Germany had to accept blame for the war and pay high reparations. Germany lost much of its territory, and its military was sharply reduced. The Weimar Republic would always handicapped by its association with the hated Versailles Treaty.

Germany also faced economic chaos after the war. Inflation was extremely serious. There were further coup attempts by right-wing leaders—including one by Adolph Hitler (1889–1945).

Finally, by the late 1920s, Germany began to stabilize. The capable Gustav Stresemann (1878–1929) became chancellor. Germany's economy and its culture began to recover, and its diplomatic isolation ended.

Stresemann's accomplishments were undone by the Great Depression, which began in 1929. After the collapse of the American stock market, Germany was cut off from American loans. The fragile Weimar Republic could not withstand the daunting challenges posed by the worldwide economic meltdown. Stresemann died, and German voters supported extremists—Nazis and communists—in the 1930 and 1932 elections.

Hitler's Nazis became the strongest party, and he became chancellor in 1933. Hitler ended the Weimar Republic and established a dictatorship. With Hitler in total control, the economy began to recover as military spending increased.

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The Great Depression greatly affected Germany. Before the Depression, the German stock market performed relatively well. With loans from the United States, Germany was able to pay its reparation debts. After the Depression, the United States did not make the loans. Germany was also hit by the Hawley-Smoot Tariff which made it harder to sell its goods to the United States. Germany was still expected to pay its reparation debts, so it turned to printing more money, thus leading to hyperinflation. By 1933, the people were growing disillusioned with the Weimar Republic.

Extremists on both the Left and Right began to have more of a voice with the people. Adolf Hitler was able to use the Depression as a springboard to national power. He claimed that the Allies treated Germany unfairly by taking away German-speaking people from their native country. He also claimed that the German army did not fail the people in WWI; rather, it was a conspiracy at home between the communist and Jewish elements in government which undermined German economics and society. Hitler promised to put people to work and to restore the German empire. The people listened, thus giving his party more power. Without the desperation of the Great Depression and Allied insistence on receiving reparations at all costs, Germany might not have turned to the Nazis.

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The Great Depression had an absolutely catastrophic effect upon Germany. The German economy was particularly vulnerable, as it was built largely on foreign capital, mainly American. So when the Wall Street Crash of 1929 hit, the impact upon the German economy was immediate and deeply damaging. American banks and other financial institutions began calling in their debts, but Germany couldn't afford to pay them back, nor could German industry find any ready markets for its exported goods. The results were disastrous: industrial output ground to a halt, causing mass unemployment; banks failed, wiping out the savings of millions.

As well as increased poverty and unemployment, the Great Depression undermined the confidence of large numbers of Germans in the Weimar Republic. Though it had never enjoyed much in the way of enthusiastic support, the Weimar Republic had, with the assistance of American loans, been getting back on its feet economically after the disasters of hyperinflation in the early 1920s. But once the Great Depression hit, many began to question the whole basis of the Weimar Republic, especially after the government implemented a brutal program of austerity that made matters worse.

People started to look for a political alternative, any alternative to a system that appeared to be failing miserably. Political life in Germany became increasingly polarized, with growing numbers flocking to the extremes of Left and Right. Violent confrontations between Nazis and Communists became an all-too-common sight on the streets of the big cities. In electoral terms, both Nazis and Communists greatly increased their support among a population tired of the political gridlock and economic chaos with which the Weimar Republic was now synonymous. The Great Depression, and the cumbersome way in which it was handled by the German government, had now put violence and extremism at the heart of German public life. Ominously, this development created the ideal conditions for the Nazis' eventual seizure of power in 1933.

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There were two main impacts of the Great Depression in Germany.  There was a huge increase in unemployment and, partly because of that, there was a turn to extremism in politics and society.

The Great Depression hit Germany very hard because it exported a lot of its goods and because it relied on loans from the United States.  Both the export markets and the loans dried up during the Depression and the unemployment rate in Germany went as high as 33%.

This economic impact turned into a political and social impact.  People were upset about the economy and turned to extremist groups like the Nazis.  They hoped the outsiders would have some sort of answer to the country's problems since the insiders clearly did not.

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