chapter five Flashcards
what three steps did Stresemann take to they get inflation under control
- end of passive resistance
- issuing of a new currency
- balancing the budget
end of passive resistance
passive resistance against the occupation of the ruhr was called of in September .
this was an unpopular choice and led to unrest and the attempted Munich putsch
stopping the passive resistance approach , led to decreasing gov expenditure as no longer paying striking workers
issuing of a new currency
introduction of the rentenmark
1 rentenmark = 1 trillion marks
insufficient gold reserves to support new currency was supported by mortgages on all industrial and agricultural land
when launched gov keep tight control of amount in circulation to prevent hyperinflation
aug 1924 rentenmark is called reichsmark , now backed by gold reserves and maintained at 30% of reichsmarks in circulation
led by schacht
balancing on the budget
salaries of government employees is cut
300,000 civil servants loose their job
tax increased for individuals and companies
gov debt decreasing
confidence increasing
1923
233 companies bankrupt
1924
6000+ companies bankrupt
making of the Dawes plan
nov 1923
Stresemann asked allies reparation committee to set up a committee of financial experts to address reparations and repayment
usa had vested interest in Germany being able to repay as reparations repayment predominently went to France who had usa loans
Charles Dawes was chairman of his committee
apr 1924
stresemann gov collapsed but he was still foreign secretary
what did the dawes plan state
reparations totalling at 6.6 billion marks
1. amount paid each year was reduced until 1929 . starting at a reduced amount of 1000 million marks and raised by annual increment of 2500 ever year for 5 years .then based on industrial performance .
2. 800 million mark loan to be recieved from usa to help start plan and help rebuild infrastructure
opinions of the Dawes plan
heated debate in the reichstag over it
Stresemann did not like the plans and referred to it as an “economic armistice “ , only agreed to it as a way to get foreign loans
the “national opposition” consisting of he dnvp and the Nazi Party attacked the policy and did not want any repayment
when was the Dawes plan agreed
July 1924 with allies
two benefits of the Dawes plan
- shows allies have an understanding of the repayment problem and inability to do so
- loans that were granted allowed economic rebuild
what two things helped stimulate the economey
Dawes plan and schacht
industrial output grew after 1924 but …
never reached 1913 levels until 1929
what industries/sectors advanced
chemical industry , large scale production of artificial fertilisers
car and aeroplane industry grew , cars were still too expensive for the average German
what improvements could be seen since 1924
living standards were rising
wages were increasing
inflation nearly 0%
how were foreign loans used other then repaying reparations
building schools , housing , municipal buildings and roads overall developing the infrastructure of the country
by the early twentieth century what had happened
an acute housing shortage due to the rising population , the overcrowding andinanitary conditions of the working class was associated with political instability , state provided affordable homes . in hope to keep political stability in future
in 1925 how many dwellings were built
178,930
over 170,000
how many more was this then previous year (1924)
70,000
why did strikes in German industry decreases
new law of compulsory arbitration
what did the public think of compulsory arbitration
bias and in favour of the unions resente4d the state for their interference
1928 dispute in wages in iron and steel industry
how was this solved with arbitruiation
arbitrator made small increase in wages , employees refused and looked out workers for four weeks .
causing a dispute .
the workers were backed by the gov and the state paid
1927 wages up 9%
1928 wage up 12%
how did Stresemann describe the economic recovery
‘dancing on a volcano’
‘if short term loans are called in, large sections of our economy would collapse ‘
what was unemployment in 1925
over 1 million
what was unemployment in 1927
over 3 million
