A Global Depression. Ch. 31.2. Europe After the War. WWI was extremely expensive and left nearly every European country bankrupt. Only Japan and America came out of the war in a better financial state. Neither country had battles occur on their homelands.
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The result was the value of the mark decreased and severe inflation set in.
As the German economy began to recover, it attracted more loans and investments from the U.S.
By 1929, the German factories were producing as much as they had before WWI.
This meant they paid a small percentage of the a stock’s price as a down payment and borrowed the rest from a stockbroker.
The system worked well as long as stock prices were rising.
If they fell, investors had no money to pay off the loan.