Chapter 5- Economic developments Flashcards
Implementation of the Rentenmark
November 1923, rentenmark introduced, happened under Hjalmar Schacht
1 rentenmark : 1 trillion old marks
Once in circulation, govt kept tight control over it to prevent future inflation
August 1924- rentenmark became reichsmark, backed by German gold reserves
End of Passive resistance
called off in September 1923 by Stresemann
Led to Beer Hall Putsch
However, it was the bets option available
Passive resistance
government ordered workers to refuse work with the foreign troops and in return the government continued to pay their wages.
balancing of the budget
Stresemann cut expenditure and raised taxes
Salaries of government employees were cut, 300000 civil servants lost their jobs
Dawes Plan
1924
Charles Dawes
although rep payments stayed the same (6.6.b), Dawes made it more manageable:
Germany were to pay 1000m marks in the first year, 2500m marks every year on from that
germany also received an 800m loan from the US
Stresemann’s view on the Daews plan
didnt believe in it
said it was nothing more than an “economic armistice”
French leaving the Ruhr
after it was clear Germany was going to start paying reparations, occupation of the Ruhr couldn’t be justified
Schacht’s work with interest rates
Reichsbank kept interest rates high to attract foreign investment
Cartel
groups of companies in the same industry working together to fix prices and protect profits
castles reduced competition but allowed profits to be reinvested
Evidence of economic improvement 1924-25
interest rate close to zero
living conditions improved
1925- 179,000 houses built
Compulsory arbitration
industrial disputes are settled by an arbitrator who decides on the solution
this was made compulsory in Weimar
Stresemann quote about economy + explanation
“Dancing on a volcano”
relying on short term loans was dangerous, if they were called in then the economy could collapse
Unemployment rates comparison 1925-29
1925: 3.4%
1926: 10%
1929: 8.5%
Hugenberg
Leader of DNVP in 1928
Against the Young Plan, 1929
became Minister for Economics and Food in the Nazi government
Farmers and the banks
When a farmer applied for a loan, they used their farm as security
when they couldn’t pay back the loan, the bank took their farm
Young Plan
1929
reduced size of reparation to 1.8b from 6.5b
concluded they had to pay reparations until 1988
annual payment was increased
br and fr agreed to withdraw troops from Rhineland
Freedom Law
1929
Hugenberg, Hitler and the Nazis opposed the young plan, this was the response
it required dismissal of the war guilt clause, and anyone who signed armistice to be hung
went to a referendum- decisively defeated
What % of the electorate voted for the freedom law
13.8%
5,825,000
Showed support of right wing nationalism
