Weimar's years of prosperity and stability came to an abrupt end, however, with the Wall Street Crash in the USA in October 1929. The worldwide economic depression resulting from the Crash affected Germany more than any other country. US investments came to an end and US loans, on which the country had depended so heavily, were gradually recalled. As other countries came to be affected by the depression, demand for German goods abroad also declined. Factories closed down and workers were laid off. Within a short time the economic situation was worse than it had been at the beginning of the 1920s. This time there was no inflation, but there was massive unemployment instead, on a scale the country had never previously known. By 1932 six million Germans were out of work.

As in the years immediately after 1919, economic problems brought to the surface people's feelings of resentment against the Weimar Republic. Support for extreme parties, both on the left and the right, dramatically increased. Stresemann had died in October 1929. None of his successors during the years 1929-32 had the same ability to hold the country together in times of crisis.