5 - Economic Developments 1924-28

Question 1

What was the ‘Great Coalition’?

Answer 1

• August 1923
• formed after Cuno’s coalition collapsed
• DVP, Centre, Socialists and DDP

Question 2

Who was Gustav Stresemann?

Answer 2

• DVP member
• Chancellor from August 1923 - Nov 1923
• responsible for ending hyperinflation

Question 3

What was Stresemann’s priority?

Answer 3

Ending hyperinflation

Question 4

What were the 3 steps Stresemann took to end hyperinflation?

Answer 4

• end of passive resistance
• balancing the budget
• issuing a new currency

Question 5

How long was Stresemann in office for?

Answer 5

103 days

Question 6

When and why was passive resistance called off?

Answer 6

when - September 1923
why - inflation was becoming so out of control, by stopping paying the Rhur workers for resistance, cut government spending

Question 7

How did calling off passive resistance benefit the stabilisation?

Answer 7

Reduced government expenditure

Question 8

What was the new currency called?

Answer 8

Rentenmark

Question 9

How many Reichsnmark = 1 Rentenmark?

Answer 9

1 trillion

Question 10

How did he cut expenditure?

Answer 10

300,000 civil servants lost their jobs

Question 11

How did cutting expenditure impact the government?

Answer 11

Debt began to fall and faith in the government was restored.

Question 12

Young Plan

Answer 12

1929 - a committee for the final settlement of reparations
- would continue paying until 1988
- reparations bill of £1.8 billion
- foreign responsibility over reparations ended
- France and Britain to withdraw their Rhineland troops by June 1930

Question 13

League of Nations

Answer 13

• September 1926, Germany allowed in the league of nations

Question 14

Rhur/ Rhineland

Answer 14

• British and French removed from Rhineland by June 1930
• 26th September 1923, passive resistance called off by Stresemann
• Rhur troops removed by 1925
• Germany began paying reparations again

Question 15

Wages

Answer 15

• middle class wages saw no increase
• industrial wages eventually overtook middle class
• 1928, dispute over Rhur wages, locked out workers for 4 weeks in refusal
• 1927, real wages rose by 9%

Question 16

Coalition Governments

Answer 16

• Cuno’s coalition collapsed in August 1923
• Stresemann formed the ‘Great Coalition’

Question 17

Agriculture

Answer 17

• food prices were low, couldn’t profit
• some richer farmers could borrow money to buy new machinery
• 1923, many saddled with debt
• global grain slump in 1925 +1926
• 1928, Farmers’ revenge, small riots

Question 18

Mittelstand

Answer 18

• gained very little
• many bankrupted by 1923
• middle class managers and clerks
  -late 1920s, wages level with industrial
• biggest losers?

Question 19

Extremist Parties

Answer 19

• many RW disliked the Young plan, reliance on others
• Alfred Hungenberg launched nationwide campaign against
• they drew up ‘freedom law’, submitted and gained referendum, shut down in Reichstag
• 4,135,000 signed, 13.8% voted for in Reichstag

Question 20

Inflation

Answer 20

• from 1923, rate was close to 0%
  -called off passive resistance in Sep 1923
• Nov 1923, Rentenmark replaced Reichsmark
• Aug 1924, Reichsmark reintroduced, backed by German gold reserve
• Schacht Currency Commissioner

Question 21

Industrial Investment and Production

Answer 21

• bigger industrial investments formed cartels
• 3000 cartels by 1925
• 90% of Germany’s coal and steel production in cartels
• after 1925, introduced tariffs on foreign products

Question 22

Dawes Plan

Answer 22

April 1924
- £40 miilion loan from America (800 million marks)
- did not reduce reparations
- start by paying 1000 million marks and increase by 2500 milliom per year for 5 years
- Rhur left from 1924-35

Question 23

Unemployment

Answer 23

• 1925, 1 million
  -1926, 3 million
• mining industry reduced workforce by 136,000 between 1922-25
• reduced by 56, 000 from 1925-29

Question 24

Attitude of Army

Answer 24

• would not go against Friekorps
• in support of extremist