1) How successfully did the Weimar Republic respond to economic challenged in the years 1918-32?

Question 1

in 1918 what was the German economy in?

Answer 1

it was in trouble
-the war, and circumstances surrounding it, had hit the economy hard.

Question 2

what had the gov before 1918 spent all its gold reserves on? what else had the government been doing?

Answer 2

the gov had spent all of its gold reserves on the war.
-it had also been printing more money. In June 1914, there were just over 6,300 million marks in circulation; by December 1918, this had increased to just over 33,000 million, causing severe inflation.

Question 3

at the end of WW1 how many printing firms were there?

Answer 3

at the end of the war there were 150 printing firms with 2,000 printing presses running day and night to make enough new banknotes

Question 4

what did the large printing of money by 1918 mean?

Answer 4

it meant that wages, and savings, lost value as prices shot up.
-some people became less willing to spend money as their wages were worth far less. This was bad for trade. Trade all over Europe had been disrupted by the war, which meant businesses suffered and people lost their jobs. This was made worse when the war ended and the production of war goods, such as ammunition, ended with it.

Question 5

by how much had farm production dropped by during the war? and what about industrial output?

Answer 5

-farm production had dropped by about 20 percent during the war
-industrial output almost halved
-the loss of both industrial and agricultural land as a result of the Treaty of Versailles slowed the economy

Question 6

during the war what developed?

Answer 6

a black market developed as inflation shot up and goods became scarce.

Question 7

from 1918 to 1923 there was a period of what?

Answer 7

there was a period of rising inflation in Germany.
-the price of everything went up with increasing speed, the worst period being during 1923.

Question 8

between 1918 to 1923 what drove up the number of unemployed?

Answer 8

between 1918 to 1923 the economic downturn, the ending of war production and soldiers leaving the army drove up the number of unemployed.
-and many employers (in an effort to stay in business, or simply to make as much money as possible) reduced wages. So wages dropped, and the value of wages, savings and payments, such as pensions also dropped.

Question 9

what were the different crises during the years 1918-23?

Answer 9

-social welfare
-debt and reparations
-the Ruhr
-hyperinflation

Question 10

how did the Weimar gov deal with the welfare crisis 1918-23?

Answer 10

-after the war the gov set up retraining schemes for those who had fought in the war, and it provided loans to help those leaving the army until they could find work.
-it also set up pension payments for the wounded, widows and orphans.
-the Weimar gov was a liberal one and so made efforts to make adequate provision, with national committees to oversee care in the Lander. Both the federal gov and the Lander provided layers of support.
-there were a variety of social welfare programmes for different groups. E.g. at the beginning of 1920 there were an estimated 1,537,000 disabled veterans and 1,945,000 survivors not classed as disabled. The gov looked after them with a mixture of lump sump payments and pensions. By 1924, the gov was still reporting about 768,000 disabled veterans, 420,000 war widows with 1,020,000 children, and 190,000 parents of dead soldiers.
-about 10% of the population were receiving federal welfare payments and many more were on regional poor relief.
-all of these payments had to be made by a gov (whether at federal or regional level) that had to go into debt to make them

Question 11

how did the Weimar gov deal with the debt and reparations crisis in 1918-23?

Answer 11

-the gov had borrowed heavily during the war; by 1918, it owed about 150 billion marks (three times what it had owed in 1914). To add to this debt, the policy of reparations laid down by the Treaty of Versailles put the gov even deeper into debt.
-at first, the gov tried to meet the payments, and carried on borrowing and printing money. If the gov had tried to change this economic policy, it would not have been able to make any payments at all.
-from 1921 on, Germany was entangled in negotiations with the Allies about how much it should pay, how much it could pay, and when payments could and should be made. The Allies, especially France, felt that Germany was deliberately trying to avoid any payments at all. They argued that the German economy had problems, but so did other European countries, especially France. Until 1924, reparations were paid in kind, for example, with coal, wood and railway carriages.

Question 12

how did the Weimar gov deal with the Ruhr crisis in 1918-23?

Answer 12

-in January 1923, Germany failed to deliver its reparation payments in full. When it fell behind in 1921, the London Ultimatum of the Allies had been that payments should be met or the Allies would occupy the Ruhr, which was vital to the German economy because of its coal and the industries based there.
-In 1923, the French did just that with the aid of Belgian troops. The gov instantly stopped all reparation payments to France (but not to the other Allies), told all German officials not to accept orders from non-Germans and urged the workers in the Ruhr to passive resistance, for example, working slowly, strikes and sabotage.
-the French replied by cutting the Ruhr off from the rest of Germany by setting up a border, patrolled by armed forces, and taking control of the postal and telegraph services. They then tried to solve the problems of worker resistance by using force or bringing in their own workers.
-neither France nor Germany benefited from the situation. In 1923, the new German coalition gov called for a stop to passive resistance tactics and began negotiations with the French.

Question 13

How did the Weimar gov deal with / what were the effects of the hyperinflation crisis in 1918-23?

Answer 13

-inflation spiralled out of control. A newspaper that cost one mark on 1 May 1922 cost 100,00 marks by 1 September 1923 and 700 billion marks by 17 November 1923
-people lost their faith in money entirely and came to rely increasingly on barter and the black market. As more and more people used the black market it could not supply enough for everyone, and its prices (which were always high) rose so much that only the rich could afford to ‘buy’ on it.
-the economy was doing badly, the gov was floundering, but those with goods to sell on the black market made huge profits.
-as well as the black market, towns, regions and even businesses began to issue their own Notgeld or ‘emergency money’.
-Even the gov cut back on staff; about 750,000 federal and regional gov employees lost their jobs. All those on fixed payments, including social welfare, suffered as these payments lost their value. Although the poor were worst hit because they had nothing to fall back on, well-off families also suffered.

Question 14

when was the crisis at its worst?

Answer 14

in August 1923 the crisis was at its worst. The government collapsed.

Question 15

after August 1923 when the gov collapsed, who was the new Chancellor and what did he benefit from? what was possibly the most significant policy decision of this new gov?

Answer 15

-Gustav Stresemann of the DVP was the new chancellor.
-he benefited from the Emergency Decree of 10 August which gave his gov powers that included postponing Reichstag meetings and governing by decree if necessary.
-possibly the most significant policy decision of the new coalition was the use of emergency decrees to avoid tying up decision-making in the Reichstag. Using decrees, the gov could act more rapidly and decisively than any coalition in the past, because it could take decisions without the need to negotiate among the various coalition members.

Question 16

what were Stresemann’s first significant policy measures undertaken for? explain 3 of the policies?

Answer 16

-they were undertaken to regain control over money
-the almost worthless mark was withdrawn and, as a temporary measure, the Rentenmark took its place in October 1923.
-the various forms of ‘emergency money’ were banned.
-the gov also used emergency decrees to control rents, wages and prices, which also helped to stabilise the currency.

Question 17

who objected to the changing of the mark to the Rentenmark and why?

Answer 17

people who still had savings objected to the Rentenmark because it had such low value against one gold mark.

Question 18

who oversaw the introduction of the Rentenmark?

Answer 18

-Hjalmar Schacht, who was made president of the Reichsbank in December 1923. He also later on oversaw the change to the Reichsmark (RM) in August 1924

Question 19

what effect did the currency change from the mark to the Rentenmark have?

Answer 19

-the currency change had the effect of restoring faith in the German currency, both at home and abroad.
-Germans changed their hoarded foreign currency and ‘emergency money’ for the Rentenmark and prices settled.

Question 20

What is Stresemann often called? After he was no longer chancellor, what did he become?

Answer 20

he is often called the architect of Germany’s economic recovery
-after he was no longer chancellor, he became foreign minister

Question 21

what did the Dawes Plan and the Young Plan do?

Answer 21

-they made reparations more manageable and provided loans to rebuild the economy.

Question 22

what were some of Stresemann’s foreign policy moves?

Answer 22

-in 26 September 1923 he called for the abandonment of passive resistance in the Ruhr
-1 December 1925: Locarno Treaty singed, in which Germany agrees to accept the borders set by the Treaty of Versailles and the demilitarisation of the Rhineland
-On 10 September 1926 Germany joined the League of Nations
-On 27 August 1928 Germany is one of those signing the Kellogg-Briand Pact outlawing war

Question 23

How did Stresemann’s foreign policy moves help recover the economy?

Answer 23

they made Germnay and acceptable foreign power again, so other countries were happier to lend Germany money and make trade agreements.
-However, while this helped to produce stability, and stability was vital to recovery, it meant that the economic recovery was based on loans, many from the USA. This was dangerous.

Question 24

what was the recovery of business like during the 1920s?

Answer 24

-the gov helped businesses to make changes that made them more efficient and profitable.
-big businesses were more able to ride out economic problems. In the early 1920s, however, many small businesses collapsed; in 1924 there were more bankruptcies than in the previous five years altogether.
-Many factories were rebuilt with the latest mass-production assembly lines and ‘time and motion’ thinking that was taking hold in the USA.
-By 1925, the chemical industry was producing one-third more than in 1913, and almost two-thirds more by 1930

Question 25

in the 1920s what did the surviving big businesses begin to form?

Answer 25

they began to form cartels whose fixed prices helped to stabilise the economy.
-some cartels organised themselves into associations of shared interests. The biggest was I.G. Farben, set up in 1925, which united various chemical-based cartels that made everything from rayon to dynamite and fertiliser.

Question 26

did business recovery mean that all was well in business?

Answer 26

no, recovery did not mean that all was well in business.
-there were significant levels of dispute between business owners and workers all through the Weimar period, with workers pressing for better conditions and owners trying to cut wages and extend working hours. Strikes and lockouts were common. There were fewer of both in the more prosperous years of 1926-27, but they never went away despite the government setting up state arbitration in October 1923

Question 27

what was trade recovery like during the 1920s?

Answer 27

-at first it was difficult for Germany to establish trade links, especially with Britain and France, because of bad feeling after the war.
-there was a shifting in trade worldwide (set off by the US policy of isolationism) that led to many countries introducing tariffs on foreign goods, and Germany suffered from heavier tariffs initially as part of the reaction of many countries to Germany’s part in the war.
-however, Germany was producing steal and chemicals that other countries needed. With Germanys admission to the League of Nations and the other international agreements that Stresemann set up, German exports were back to their 1913 levels of ten billion marks by 1926, and by 1929 exports were 34 percent higher than in 1913

Question 28

what was still a significant employer in the 1920s?

Answer 28

farming.
-between a third and a quarter of all workers were agricultural workers

Question 29

which farms managed better, the bigger or smaller ones?

Answer 29

The bigger ones managed better
-they could invest in new machinery and farming techniques. Whereas, many small farmers were heavily in debt and could not afford to pay the interest on their loans or even, in some cases, their taxes.

Question 30

what advantaged did big landowners such as Hindenburg have?

Answer 30

they had political influence that enabled them to block farming reforms where they did not work in their interest, such as the 1918 Reich Settlement Law that made landowners sell land to the government to be redistributed among their poorest tenants. They simply strung out the negotiations over the land sales. The influence of the wealthy landowners also allowed them to press for high grain subsidies that benefited most of those with big farms.

Question 31

did the Weimar gov spend heavily during the 1920s? How did it fund all its spending?

Answer 31

yes it did.
-it subsidised grain production, it subsidised industry and it spent heavily on social welfare, providing housing and benefits for the poorest
-if funded all this by borrowing and taxation

Question 32

with some economic recovery were ordinary people more well off than they had been before the war?

Answer 32

no, even with some economic recovery most ordinary people were not as well off as they had been before the war, so they paid less tax and resented the tax raise which the gov did to fund all its spending.
-in 1913, the lowest tax band was made up of 47% of taxpayers; this hit 62% in 1926 and was 55% in 1928. This meant that the gov had to borrow money it might otherwise have made by rising taxes. This was another way in which the economic recovery was flawed. Not only was it built on foreign loans, but it was kept afloat by gov support. The gov even had its own bank to provide federal and regional funding; this helped businesses for only as long as the gov could keep lending them money.

Question 33

what was a final problem to do with industrial expansion and production?

Answer 33

a final problem was that industrial expansion and production was damaged by the constant disputes between businesses and workers, which affected productivity and drove wages up until 1930, when the depression led to such high unemployment that people were willing to work for any wage at all.

Question 34

what happened in 1929?

Answer 34

The US economy collapsed and US banks not only stopped renewing short-term foreign lending, but also called in loans from abroad. All other countries it was lending to were hit hard and in similar ways.

Question 35

what happened to Germany’s industrial production after the wall street crash? what happened to unemployment in the same year?

Answer 35

Germany industrial production fell, slowly at first, then more rapidly. By the end of 1932, it was about half of its 1928 levels.
-unemployment rose in the same period and wages fell by 20-30%. However, because prices fell too, real wages only by about 14 percent.

Question 36

how did the Grand Coalition government, without Stresemann, deal with the effects of the Wall Street Crash? what happened to this coalition in 1930?

Answer 36

-the gov was arguing not co-operating. It failed to cope with the Depression because it could not make decisions or act quickly, and President Hindenburg was resistant to more government by decree.
-it fell and was replaced by one led by Chancellor Bruning, who suggested cuts in government spending (especially on social welfare), wage cuts and higher taxes. These policies were rejected by the Reichstag. Reluctantly, Hindenburg, who agreed with Brunings policies, went back to government by decree in July 1930 in order to put Brunings policies into practice

Question 37

What did Bruning’s policies bring?

Answer 37

Bruning’s policies brought deflation but avoided devaluing the currency, which he feared would bring inflation, or even hyperinflation, as in 1923.

Question 38

on 1 July 1931 what did the Hoover Moratorium, an international agreement, suspend?

Answer 38

it suspended the need for Germany to pay back loans, or to pay interest on them, for a year

Question 39

In December 1931, after leading German trade unionists suggested a plan for job creation, as in the USA, to boost the economy, what was Brunings response? Did Brunings policies in the years 1930-32 work?

Answer 39

his response was another emergency decree that introduced wage cuts, rent cuts and tax raises. It also said reparations would not be paid for the next year.
-no, Brunings policies in the years 1930-32 did not work; they simply deepened the recession. Industrial production fell, prices fell and exports fell, all by around 50 percent. Unemployment rose to its highest level ever in 1932

Question 40

in late May 1932 who was Bruning replaced by and what did they introduce? however, what was the gov caught up in? Later on in December 1932 what was changed?

Answer 40

he was replaced by Von Papen who introduced some tax concessions and subsidies for businesses that created new jobs and produced some economic improvement.
-however, the gov was by now caught up in political problems that made it hard to focus on the economy and produce a coherent policy.
-In December 1932 , the chancellor was changed again.

Question 41

in December 1932 who was the new chancellor and what did he appoint?

Answer 41

the new chancellor was von Schleicher, he appointed a Reich Commissioner for employment who drew up a list of public works to be financed by the gov in order to create employment. He was given a budget of RM500 million, but he had not put anything into effect before the Nazis came to power and changed the system of government entirely in a very short space of time.

Question 42

what was the living standards like during 1918?

Answer 42

-during WW1 there were severe shortages. It was hard to farm productively when all of the horses had been requisitioned for the Front. Much of the food produced also went to the Front. Allied blockades of ports stopped supplies getting into Germany.
-infant mortality and stillbirths, often due to the poor health of the mothers, were high.
-malnutrition was common. E.g. in one district of Berlin, 90% of all children aged between 2 and 6 years were undernourished.
-so the Weimar gov inherited a country where the standard of living, especially for the poor, was very low.

Question 43

what were some of the things the Weimar gov did to try and increase the standard of living after WW1?

Answer 43

-it provided benefits for the poorest.
-it regulated pensions.
-it did its best to cope with the large number of people who had been dependent on those who died in the war.
-immediately after the war, these measures meant that the standard of living improved, more people were employed and wages rose.

Question 44

what was the living standard like after WW1?

Answer 44

-while the Weimar gov introduced some policies to increase the standard of living, as inflation galloped away, it was impossible for the standard of living to do anything but drop sharply.
-as unemployment rose, many people barely survived by doing badly paid jobs with long hours. Women, especially single parents, often had to take in home-based work. Even children had to help. Even in factories, which were more regulated, the eight-hour working day, established in 1918, had all but disappeared by 1924.
-many families lived in cramped housing with shared toilets and washing facilities. The poorest shared one room and had no running water at all.