C5 Economic developments Flashcards
Extent of economic recovery
By 1925 Germany appeared more stable and prosperous
Industrial output grew after 1924
1927 also a good year
Cartels
Groups of companies in same industries that would combine together to fix prices and protect profits
By 1925 there were around 3000 cartels including 90% of Germany’s coal and steel production
Tarrifs
After 1925, under terms of TOV they were able to introduce tarrifs
Tariffs are duties and taxes paid upon entering a country, their purpose is to make foreign goods more expensive than those produced in a country
Protect firms from foreign competition
Chemical industry improvement
Large scale production of artificial fertilisers
Extent of recovery (outside industrial production)
Car and aeroplane industries developed
Inflation rate was close to zero and living standards rose as wages began to increase in 1924
Government response to poor conditions effective political stability
In 1925, 178,930 dwellings built, 70k more than year before
In 1926, 205,793 more new homes
Number of strikes in 1924 to 1930 and reason for change
1924- 1973
1930- 353
New system of compulsory arbitration for settling industrial disputes
Employers felt this was biased in favour of unions
Real wage rises
9% in 1927
12% in 1928
Limits to economic recovery
Unemployment was a continuing problem ;1925 1 million, 1926 over 3 million
Mining companies reduced workforce’s by 136,000 between 1922 and 1925 and a further 56,000 between 1925 and 1929
Mittelstand gained very little, increase in working class
Agriculture (limit to economic recovery)
Gained very little benefit
Kept food prices low and very few farmers were able to make profit
After 1923, easier for farmers to take out loans, made it worse as they were in debt during time of falling prices
By 1929, German agricultural production was at less than 3/4 of pre war levels
Reparations and young plan
Reparations bill considerably reduced, required to pay £1.8bn , £6.5bn but annual payment increased
All foreign control over payments was ended and responsibility for paying reparations placed solely on German Gov
Consequences of young plan
Britain and France agreed to withdraw all their troops from Rhineland by June 1930
Young plan inflamed nationalist opinions
Hugenburg leader of DNVP launched a nationwide campaign against the plan
‘Freedom Law’ demanded war guilt clause , attracted 4,135,000 signatures. 13.8% voted for it indicating the depth of right wing support
Balancing the budget
Cut expenditure
Salaries in government cut 300,000 civil servants lost their jobs and taxes raised for individuals and companies
Companies going bankrupt rose from 233 in 1923 to over 6000 in 1924
New currency
Rentenmark replaced reichsmark
One rentenmark = one trillion reichsmark
Backed by gold reserve
