4.1 - How did the Depression affect Germany?

Why was America rich after WW1?

It had sold weapons to the allies - also made cars and fridges.

How did Americans spend their disposable income?

They bought shares in American companies to make a profit

What is a share?

A portion of ownership of that company, entitling you to a share of the profit.

How else did people afford shares?

They applied for bank loans.

When was the Wall Street Crash?

October, 1929

Why did the American stock-market crash?

People sold their shares, many for les that they bought them for, meaning the price of a share (and the value of the company) dropped, which caused many others to sell too.

Why were bank loans dangerous for buying shares?

Many couldn’t pay the banks back, because their shares were worth less than they bought them for.

How did the banks respond to those who couldn’t pay their loans back?

Sent debt collectors

Why did businesses close?

American’s couldn’t afford to buy any new goods at all

Why did the crash spread to Europe?

Because American consumers also bought products from them

Why did European factories close?

Americans were not buying their products anymore

Why was Germany hit the hardest by the great depression?

They relied on Americans to buy their products, and on American loans (which the USA now demanded back) - Germany couldn’t pay.

How many Germans were unemployed in 1928?

1.25 million

How many Germans were unemployed in 1932?

6 million

Why did support for extreme parties grow?

They promised radical solutions to the complex problem - Germans were desparate.