Welcome to the latest chapter of this story...
Chapter 21 (1929)
As 1929 began Germany was recovering internally so it was now time to begin looking outward, despite Allied commitments to pacifism in recent years the Government in Berlin was still certain that they would still eventually start a war to prevent Germany from regaining her rightful land. Frequent border skirmishes with the so-called German Republic in the Rhineland had seen their shared border becoming increasingly militarised and this led to the construction of a massive line of fortifications on this border that would become known as the Luttwitz Line after former Chief-of-Staff Walther von Luttwitz. Luttwitz had lost his position in the mid-20's due to allegations of having Nazi sympathies but he had long since been vindicated of such charges and was once again heavily involved in the improving and modernising of the Deutsches Heer. The building of this line would help if the next war finds Germany fighting on two fronts again as these fortifications will aid them in holding off the Western Allies while achieving a quick victory over the Intermarium to the East, hopefully with Austrian support.
Not long after there were further military development as the argument over the tactical doctrine for future conflict was decided. For several years now the senior members of the German General Staff had debated between tactics centred around superior firepower and those based on mobility and swift advances. The more traditionalist officers favoured the firepower doctrine while the mobility doctrine was supported mostly by younger officers such as Heinz Guderian, who pointed out the success of such tactics during the Spring Offensive in 1918 as well as the Austro-Hungarian Army's 'Blitzkrieg' against Italy in 1926. Eventually support for the Mobility Doctrine won out as the traditionalists saw the potential for such tactics as a way to achieve a quick victory on one front, something the Deutsches Heer would desperately need having failed to achieve such a victory in 1914.
The Allies were clearly concerned about Germany regaining stability and the efforts to improve her military as they chose now to demand a hefty lump sum of reparations. The decision about whether or not to hand over this payment was hotly debated in the Reichstag with many doubting that the Allies would take action should the Kaiserreich refuse to pay up. These debates dragged on for about a week by which point the British decided to force the issue, deploying the Royal Navy to the North Sea and threatening a complete trade embargo against Germany should she refuse to pay. Seeing that for now not paying the hated reparations would do more harm than good, Berlin conceded and agreed to pay this round of reparations. As expected this decision did not prove popular with the German people as the restored Kaiserreich was supposed to stand up to the Allies regarding the terms of the Versailles Treaty. This disappointment will not be repeated as the Government is now even more determined to prevent a repeat of this crisis in the future.
In Mid-September there was concerning economic news from America as the Dow Jones Industrial Average declined. Hopefully this is only a temporary problem as an economic crash could have a major effect on Germany, whose own economy is already weakened by the reparations payments to the Allies earlier in the year. This situation will be closely watched in Berlin.
In the East Asia there was further conflict as the Soviet Red Army had been fighting a border war with Zhang Xueliang, a Chinese Warlord who served the Republic of China. This conflict, which had been ongoing since July, was being fought for control over the Chinese Eastern Railway which had been under joint supervision between the two countries since 1924. By October the Chinese, after some early success, had been defeated by the USSR and after a ceasefire it was agreed that the Chinese Eastern Railway would return to joint supervision.
In Early December Germany's greatest fears were realised as the decline of stock prices in the US continued to worsen and led to a disastrous economic crash in Wall Street. Germany still had some unpaid American loans and it wasn't long before the US Government was demanding these loans to be repaid now. This could be disastrous for the German Economy...
...and sure enough the struggle to repay these loans led to Germany suffering their own economic crash. Germany, however, was far from alone in this as almost every country in the world was affected by what became a global economic crash. Within weeks of the German crash there was a dramatic rise in unemployment, a sharp decrease in trade and an almost complete halt to Germany's ongoing program of Industrial Expansion. The Government tried to weather this storm and used what little money remained to aid those worst affected by the crash but it was nowhere near enough. The Great Depression had begun.
With this economic crash the general feeling of optimism that had grown stronger amongst the German people in the last few years disappeared in a matter of weeks as many now didn't even know where their next meal was coming from. As the 1930s begun the future once again seemed bleak for Germany, although this time they were far from alone in this feeling.