ABSTRACT
The depression put an end to the economic growth and prosperity of the late 1920s, which by 1928 had raised the standard of living in Germany to the pre-war level. After the Dawes Plan went into effect in 1924, American loans and investments stimulated the German economy and provided the funds to meet reparations payments. Under the Dawes Plan some 25 billion marks flowed into Germany in the form of bond purchases and loans to industry. The precipitous decline of prices on the New York Stock Exchange in October 1929 eliminated this source of credit, with disastrous effects on the German economy.
