5 - Economic Developments 1924-28 Flashcards
What was the ‘Great Coalition’?
- August 1923
- formed after Cuno’s coalition collapsed
- DVP, Centre, Socialists and DDP
Who was Gustav Stresemann?
- DVP member
- Chancellor from August 1923 - Nov 1923
- responsible for ending hyperinflation
What was Stresemann’s priority?
Ending hyperinflation
What were the 3 steps Stresemann took to end hyperinflation?
- end of passive resistance
- balancing the budget
- issuing a new currency
How long was Stresemann in office for?
103 days
When and why was passive resistance called off?
when - September 1923
why - inflation was becoming so out of control, by stopping paying the Rhur workers for resistance, cut government spending
How did calling off passive resistance benefit the stabilisation?
Reduced government expenditure
What was the new currency called?
Rentenmark
How many Reichsnmark = 1 Rentenmark?
1 trillion
How did he cut expenditure?
300,000 civil servants lost their jobs
How did cutting expenditure impact the government?
Debt began to fall and faith in the government was restored.
Young Plan
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
League of Nations
- September 1926, Germany allowed in the league of nations
Rhur/ Rhineland
- 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
Wages
- 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%
Coalition Governments
- Cuno’s coalition collapsed in August 1923
- Stresemann formed the ‘Great Coalition’
Agriculture
- 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
Mittelstand
- gained very little
- many bankrupted by 1923
- middle class managers and clerks
-late 1920s, wages level with industrial - biggest losers?
Extremist Parties
- 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
Inflation
- 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
Industrial Investment and Production
- 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
Dawes Plan
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
Unemployment
- 1925, 1 million
-1926, 3 million - mining industry reduced workforce by 136,000 between 1922-25
- reduced by 56, 000 from 1925-29
Attitude of Army
- would not go against Friekorps
- in support of extremist
