"The economic position is only flourishing on the surface.
Germany is in fact dancing on a volcano. If the short-term credits are called in, a large section of our economy would collapse." – Stresemann

• Hyperinflation. In January, 1921, there were 64 marks to the dollar. By November, 1923 this had changed to 4,200,000,000,000 marks to the dollar.
• Companies throughout Germany went bankrupt
• America gave Germany 90 days to start repaying the money loans to her
• Banks failed – savings accounts were instantly wiped out
• Devaluation of the mark
• The passage of the Smoot-Hawley Tariff Act in the US in 1930 prevented Germany industries from importing their goods into America, thus contributing to the collapse of Germany’s international trade
• On the 24th October 1929, “Black Thursday”, there was panic selling on the New York Stock
Exchange reacting to a business crisis in America. Early the following week, “Black Tuesday”,
29th of October, panic selling set in again. 16.4 million shares were sold, a record not surpassed for forty years. Share prices went into freefall. Ten billion dollars was wiped off the value of share prices in one day.
• Firms began to cut back drastically. Industrial production fell quickly and by 1932 it was 40% of its 1929 level

• Workers were laid off in their millions
• Unemployment affected nearly every German family
Year
September 1928
September 1929
September 1930
September 1931
September 1932
January 1933
Unemployment figure
650,000
1,320,000
3,000,000
4,350,000
5,102,000
6,100,000
• Most of the unemployed were male
• Now that they have lost their job, they can no longer provide their family what they need: food, heating, clothes etc
• Unemployment rose to 30% by 1932

• Desperate, many turned to more extreme political parties in Germany – Nazi and Communist
• In 1928, the Nazi Party had gone bankrupt as a result of spending too much on street parades – saved by a right wing businessman Hugenburg
• In the 1930 Reichstag election, the Nazi party gained 143 seats – Hitler only expected 50-60
• In the July 1932 Reichstag electron, the Nazi party gained 230 seats, making them the largest party in the Reichstag
• In the 1932 presidency electron, Hitler gained 13,400,000 in comparison to Hindenberg’s
19,360,000

• Reparations repayment policies were abolished after Germany promised to pay the final 2.6 million marks to the European Reconstruction fund,
Germany only paid 1/8 of the Reparations intended to be paid
• Germany was allowed to get away with annexation as people only saw this as taking back what they have lost
• Germany withdrew from the League of Nations
• Franco-German Saar agreements were signed were the Saar Territory was given to Germany

• Disarmament Conference – Germany was allowed to increase army to
200,000 men and an air force half of the size of the French
• Germany started re-arming in 1935 and increased its army to 400,000 men
• Anglo-German naval agreement allowed Germany to build a navy which is
35% of Britain’s navy, this agreement was made because of France siding with the Soviet Union, making Britain suspicious