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The Weimar Republic was seen to be stable during the period of 1924-1929. Some even saw it as a fertile ground for new artistic movements. Even foreigners agreed that indeed the German economy was recovering and that the society was modern and free. Political recovery and success in international politics also sustained the thought of the recovery. But as soon as depression hit, the Weimar fell apart; this has happened because all this glamour was built on unstable foundations, bound to collapse even without the push of the international economic depression.

Large American based loans, the stabilisation of the German mark and the Dawes plan in 1924 brought economic stability and growth. The Dawes plan generally rescheduled German reparations in accordance with its economic situation while also bringing money into the economy through foreign loans; it even involved the evacuation of the Ruhr by the French troops. William Shirer, an American journalist at the time wrote "A wonderful ferment was working in Germany. Life seemed more free, more modern, more exciting than any place I had ever seen"; this shows that people were happy, and could afford an exciting life, because of the good economic conditions. Gilbert Parker, an American businessman also agreed: "German business conditions appear to have righted themselves on a relatively high level of activity". Economic data shows that Germany was truly recovering; Iron, steel, coal and heavy industries exceeded or at least equaled the export and out-put levels of 1913. Clearly the American loans had brought about a revival of the industry, and larger investments into capital, thus modernizing and repairing the existent factories or even creating new ones this, in turn, brought about higher efficiency (i.e. higher levels of productions). This has then led to an increase in wages and the introduction of social welfare benefits. The Republic seemed stable and strong.

But in fact, the actual recovery started stagnating and moving backwards around 1925 1926. In 1926 production declined. Besides this, unemployment during the Weimar period never went below 1.3 million and was the worst in agricultural sectors. In truth, the international situation was not beneficial for Germany's recovery, as world trade was at a low point during that period. Germany's dependency on foreign investment and the lurking problem of paying back war reparations meant that in reality, the republic's situation was quite unstable, reliant of many

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