10 Economic Developments Flashcards
what did the government do instead of increasing the taxed for the rich?
- issued the treasury bill
- borrowed for anyone as a war loan, to be paid back after the war with interest
- print more money
how much did the circulation of money increase?
1913: 2,000 million mark
1919: 45,000 million mark
by how much did the national debt grow?
1914: 5,000 million mark
1919: 144,000 million mark
what happened to the productivity and general prices because of the war?
annual productivity dropped by 4% annually
prices of basic foods tripled
what happened to them after the war?
- losing the war meant that they could not pay back the war loans
- ToV conditions
did the government stop borrowing after the war?
no, they continued. they could not devalue a risk of political repercussions as peoples savings would have been lost.
they needed it to rebuild after the ToV
why did the government allow small amounts of inflation?
is was seen to stimulate the economy
unemployment compared to Britain?
by 1921, 1.8% compared to Britains 17%
how did prices change between 1918 and 1920
1918-1919: doubled
1919-1920: quadrupled
why was the ruhr invaded?
Germany could not deal with the level of reperations they had to pay and thought that if the allies saw his the the policy of ‘fulfilment’ would take place.
jan 1923 germany defulted on a delivery and the French and Belgium troops invaded the ruhr.
how did chancellor Cuno respond?
stopped all reparations and ordered passive resistance in the ruhr. the workers would sop working and the govt would still give them their wages
how did Cuno’s reaction harm the economy?
- paying workers was a further drain on govt resources
- tax was lost from businesses
- Germany had to import coal
- confidence in the mark dropped
what what was the monthly rate of inflation in 1921?
passed 50%, now hyperinflation
what was the economy like by Nov 1923?
- currency was worthless
- 2,000 printers working 24/7 to print money.
- workers had o be paid twice a day as there was hourly price rises
- barter became more common
when was Stresemann chancellor?
Aug 1923
what did stresemann do in the ruhr?
called off passive resistance
who was Schacht?
Stresemann appointed Schacht as Reich Currency Commissioner
what did Schacht do to the currency?
introduced the Rentenmark values 1:1 trillion mark.
this was backed by land and industry rather than gold.
he took charge of the Reichbank. introduced fiscal policy and tried to balance payments by introducing new tax to businesses and individuals and reducing govt spending
how did the change growth between 1924-5 effect businesses?
prudently run businesses prospers while those lying on cheap credit failed.
Bankruptcy rose from 233 in ‘13’ to 6,000 in ‘24’.
what happened to the Rentenmak in 1924?
changed to Reichmark
how did the end if hyperinflation effect reparations?
‘23’ an allied committee governed by Dawes came to a plan for the German repayments.
- the amount they paid annually decreased to 2500 million marks annually
- Germany received a loan of 800 million mark from the USA
who opposed the ‘policy of compromise’ with the USA?
DNVP and smaller right-wing groups like Nazis
what benefits did the ‘policy of compromise’ with the USA?
- the allies accepting that germany can’t cope with the reparations
- 1924-30 loans of 25.5 million marks
- the evacuation of the ruhr
- rented financial confidence in Germany
what was inflation ad unemployment in 1926?
it was at Zero however unemployment peaked at 20%
what was the young plan?
Aug 1929, reduced the reparations bill by 75% and extended the payment period to 59 years
who and how was the young plan criticised?
right wing politicians like Hugenberg and Hitler.
schacht disagreed and resigns from office
opposition forced a referendum on the issue but filed to stop it.
who was Rathenau and what did he do?
he was a large businessman who formed 200 war materials cooperations
what was the Central Purchasing Company?
set up to maintainability trade. because they were limited t their experts it built up a considerable debt
what did the pre-war economy focus on?
import and self sufficiency through producing new scientists and manufacturers
1913 and 1919 industrial action
1919 levels was a little over 1/3 of that in 1913.
what was the trend in post war growth
growth between 1920-22 and a sharp decline in 1923.
pick up again in 1927 and exceed post war levels in 1928-9.
what was seen as the golden years? why?
1924-29, because hyperinflation was over and the currency was stabilised.
what happened to production between 1928-9?
when their loans fell, so did production
what was the overall growth in economy?
1913-1929, 4%. compared to US 70%
how many cartels were there? when?
1925: 3,000 cartels
what happened to coal, iron, steel production?
1927: coal reached 79%, iron reached 68%, steel reached 86% of its free 1913 levels
where were there industrial advances?
chemical industry with fertilisers, electrical industry with war demands, car industry with luxury cars.
what happened to agriculture during the war?
massive decline as farmers had been conscripted leaving women and the old.
turnip winter 1916-7 and 1917-8 poor harvests
which law effected agriculture? why?
Reich Resettlement Law of 1919
giving large states to small farmers, only half a million hectares were distributed due to r-wing opposition in reichstag. only 3% of them benefited
drawbacks of USA investment?
relying so heavily on their investment made them very vaunrable to a recession in any global market.
was economic improvements universal?
no, growth was erratic. small businesses and agriculture never benefited.
what was germanys economy like compared to the rest of the world?
not impressive
