The main cause for increased support for the Nazi Party in the years 1929-1932 was economic. After World War I, the defeated Germany emerged as a republic subsequent to the revolution in November 1918. A national assembly was, thereafter convened in Weimar, where the German Reich was formed with a new constitution. However, this Weimar Republic was besought with problems which included hyperinflation, political extremists, and very contentious relationships with the victors of World War I, who subjected Germany to humiliation and unreasonable demands in the conditions of the Versailles Treaty. These conditions forced Germany to make large territorial concessions and to pay reparations to the Entente powers. Financial reparations were 132 billion Marks (then $31.4 billion), an outrageous amount. Because Germany felt the amount unjustifiable and impossible, renegotiations were made and the debt reduced. The renegotiation of the financial reparations resulted in the Dawes Plan and the Young Plan. Because the Dawes Plan was unworkable, as Germany could not meet the payments, a committee headed by American industrialist Owen Young reduced payments by designing
...one unconditional part, equal to one third of the sum, and a postponable part, equal to the remaining two-thirds, which would incur interest and be financed by a consortium of American investment banks coordinated by the Morgan [banker J. P. Morgan] Guaranty Trust Company.
However, Germany was fraught with social and political problems as the Weimer Republic's liberal democracy ended with the dictatorial presidency of Hindenberg, and then the dictatorial emergency powers of Chancellors Bruning, Papen, and Schleicher. Finally, when the Great Depression of 1929 occurred in the United States, the economic earthquake sent devastating ripples into Germany as the U.S. banks withdrew its money. As a result, the Weimar Republic failed because America had been propping up Germany with the Dawes and Young Plans. After the Crash of Wall Street, American banks gave Germany only 90 days to repay them; no other country could support Germany, either, because they were devastated from World War I, as well. With hyperinflation, also, German companies went bankrupt and the economy was in shambles as people could not afford the cost of goods and were starving and desperate. In fact, unemployment rose from 650,000 in 1928 to 5,102,000 in 1932.
These conditions were what helped the Nazi Party rise to power. Before 1930, the Nazi party only received 2.6% of the popular vote; however, after the Great Depression, it received 18.3% of the popular vote in the election and gained 107 seats in the Reichstag, and in 1932 it gained 33.1% of the popular vote and 196 seats in the Reichstag. Starving and desperate, Germans rejected a republic that had failed them, and turned their hopes to a government that would take control of their lives and provide them a hope of renewal.