Notes+from+10-20

Why did the economic downturn of 1929 hit Germany so hard?

1.) German economy was weak because of loans from the US, and using them to pay reparations from WWI. The German industry was loan-funded, causing high wages and an artificially high demand for labor. Though they were an export based economy, other countries were not bring in exports because they were also suffering bad economic times, causing Germany to have an excess amount of raw materials and products.

__In a Recession__ 1. Keep farming--1. Way fewer orders 2. Keeps farm-2. Way fewer man-hours 3. Slightly lower price --- 3. Only works 1/25th of former hours 4. No capital investments (No new tractor this year) *Like a sneeze or a cold*---*Like the flu*
 * British Farmer-- German Tractor Producer**

-If Germany takes loans from the US and invests it in German business, gaining nothing, they are not going to be able to pay off the loans.