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How Did The Dawes Plan Lead Up To The Great Depression

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Through the Dawes plan there was a temporary relief for the growing unrest of the German public and it posed a temporary solution to end the ongoing crisis. With the American investment the German economy began growing which caused a decrease in violence and radicalism on the streets. Once civil stability had been restored, Stresemann began stabilising the German currency, which promoted confidence in the German economy and allow them to return to paying their reparations , while at the same time feeding and supplying the nation. The period from 1924-1929 would become known as the „Goldenen Zwanziger“ (the golden twenties). Through increased consumer confidence and purchasing power based on the implementation of the Reichsmark and the continued …show more content…

The financial support of the United States allowed for a rapid recovery of the German economy which, despite the hyperinflation of 1923, even enabled it to return to being one of the largest global economic powers. However in 1929, the onset of the depression in the United States through Wall Street Crash produced a severe shockwave in Germany. When American banks withdrew their loans to German companies, the onset of severe unemployment could not be stopped by conventional economic measures. Unemployment grew rapidly and reached 4 million in 1930. For many German people the onset of the Depression felt like a return to the suffering of the hyperinflation crisis. This caused them ultimately to completely lose trust into the ability of the Weimar Republic to ensure constant economic stability and the longevity of progress. Therefore they seeked more radical political parties as they saw them as a better alternative to the repeated failure of democracy under the Weimar Republic. This caused a return of civil unrest which further escalated the situation as supporters of the radical left communist party KPD began to clash with SA of the fascist

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