1924-1929 economic Flashcards
Who replaced Cuno as Chancellor in August 1923?
Gustav Stresemann
What did Stresemann do to stop hyperinflation?
- Ended passive resistance
- issued new currency - Rentenmark
- Cut public expenditure and raised taxes to balance the budget
Who became the Reich currency commissioner in 1923?
- Hjalmar Schacht
How many companies went bankrupt from 1923 to 1924?
- 233 in 1923 to over 6000 in 1924
How did the Dawes Plan make reparations more manageable?
- Amount paid yearly was reduced
- Loan of 800 million marks from USA
What impact did the Dawes plan have on industries?
- Industrial output grew
What was the new system of compulsory
arbitration and what result did it have on the number of strikes?
- Industrial outputs settled by independent arbitrator
- Often sided with workers - caused resentment from employers to government
How many people were unemployed by march 1926?
Over three million
What groups gained little from the economic improvements?
Farmers
Mittlestand
What was agreed under the Young Plan?
- Germany agreed to pay reparations until 1988
- Bill reduced to £1.8 billion
- Annual payments increased
- Control over payments given to Germany
- Britain + France withdrew troops from Rhineland by June 1930
What are examples of improvements in German economy?
- Loans from USA
- Money from Dawes plan stimulated foreign trade and investment
- Wages increased
What are examples of a decline in the german economy- superficially promising?
- prices in agriculture fell - peasants hostile to weimar democracy + voted nazis
- High taxes especially in 1928
- Employers + industrialists resented increased payment on welfare and wage price rises
- Behind other countries on growth levels
- Too dependent on loans
- Importing more than exports
Why were people in debt winners during this recovery?
Their debt was wiped out due to hyperinflation and were given more governmental support
Who wasnt winning during this period? And why?
People on fixed incomes
Lost out during hyperinflation; salaries could buy little + lost savings
How did the Dawes plan stimulate industry?
- Loans for better machinery
- Funded house buildings
How many houses were built due to the dawes plan + the effect on it? And when?
-1925 -> 178 930 houses built
- Linked with political extremism as housing was improved so there was less resentment
What was the issue with grain?
- world surplus
- prices for it fell
- farmers made less money
- bankruptcies grew + peasant violence
-1928 - farmers revenge + voted for Nazis
How many houses were built in 1925 from the Dawes Plan?
178,930
How many marks were spent on imports and exports in 1925?
12.4 thousand million marks spent on imports
9.3 thousand million marks made in exports
Why did people resent ending passive resistance?
They felt like they were giving in to the Allies
What two industries developed and what was the impact?
Chemical industry
Car and aeroplane industries
Meant more jobs available = more money being made
What were industrial cartels and what did they do?
decreased investment and competition in industry
How many cartels were there by 1925 and what did they control?
3000
Controlled 90% of German coal and steel
What impact were there for creditors and debtors?
- Plan agreed which reassessed debts at 15% of original value
- Creditors only got part of money back
- Debtors had to still find money to pay debts back
How much did strikes decrease and what was the impact?
- 1925 there was 1708
- In 1926 there was 351
- Shows there was better living standards and less resentment
- Less working days lost so more money is made
Why was unemployment a problem?
- By march 1926 - was at 3 Million
- More people searching for jobs, government spending cuts
- companies reducing their workforce
- Mining companies reduced workforce by 136,000 between 22-25
Why did Conservatives resent the new welfare packages?
-Workers given arbitration - could discuss wage increases and working hours
- Arbitrators set wages - seen as ‘political wages’ as they believed they were set high to win working class vote
- Became more suspicious of democracy * felt unheard
Why did the Stab in the Back myth continue?
- Weimar failed to develop symbols that won popular support
- Few heroes or commemorative days
- Constitution day in 1928
- Negative symbols endured
What type of production increased after 1924 , and exceeded pre 1918 levels?
Steel production
More resources and money flowing
Why was agriculture failing to recover?
- Lack of land reform
- 20% of land belonged to 0.7% of farmers
Why was the growth of Cartels unhealthy?
- Stifled competition
- Made German industry less likely to cope with downturn in economy
Why would greater competition between companies have been good?
- Benefits all companies
- Forces companies to sell more goods at lower prices
Why was foreign investment high?
- German economy attracted foreign investment
- Place for potential economic growth
- Production levels exceeded those in 1913 by 1928
- Interest rates were high
what was the Welfare state set up?
- Living standards rose
- Housing construction rose
- New public works schemes - new airports, housing estates, swimming pools
- Unemployment insurance extended to 17.25 million
How much did USAs economy grow compared to Germany’s between 1913 and 1929?
USAs -> grew by 70%
Germany -> Grew by 4%
