Depression (oct 24, 1929 – aug 1, 1934)

Description:

Since the Dawes Plan was put into place, many Germans feared that the German economy was too reliant on the American economy and American businesses (which dominated the German market).
With American businesses doing well, many people in Germany were encouraged to buy shares in American companies (the government had received much of the Dawes loan in such shares). As the demand grew, so did the prices and people did well from stock market trading - with many borrowing money from the banks to invest with.
The stock market crash in America send shockwaves through the German economy. American businesses bought less and less form the German market and investors lost all of the money that they had invested.
To make matters worse, concerned with their own economic welfare, the American government recalled the loans it had made as a part of the Dawes and Young plans and American investment and loans to Germany were withdrawn.
This caused a huge financial crisis in Germany (worse than in the USA) because the Weimar government had no money with which to aid the economy and businesses failed because prices dropped and the lack of money led to much more conservative spending, banks had to close and unemployment rose significantly as businesses had to lay off workers - by 1933 1 in 3 Germans were unemployed.
Poverty increased and people went hungry and, facing a second financial crisis in a decade, were resentful of the government.
This gave rise to extremism as people on both sides of the political spectrum turned there back on the Weimar government and voting Nazi or Communist.

Added to timeline:

Date: