Economic Flashcards
What are real wages?
How much you can buy from your wages
When did Gustav Stresemann’s coalition come into power and who did he take over from?
• August 1923 - height of hyperinflation
• Took over from Cuno
What was Stresemann’s party?
DVP
How long was Stresemann Chancellor?
103 days
What was Stresemann’s priority?
To bring inflation under control
What were the key three steps to bring inflation under control?
• End passive resistance
• Issue a new currency
• Balance the budget
When did Stresemann end passive resistance in the Ruhr and why?
September 1923
He felt that he had no alternative as Germany’s economy was falling and and inflation was speeding up
What did ending passive resistance do?
The government stopped having to pay workers on strike who refused to work for the French, decreasing government expenditure
What reactions were there to the end of passive resistance?
Highly unpopular, led to serious unrest and the Beer Hall Putsch (Munich Putsch)
Who directed the issuing of new currency?
Schacht with Stresemann’s help
When was the Rentenmark introduced?
November 1923
What was the exchange rate? _ rentenmark for ___ marks
1 rentenmark for 1 trillion marks
What was the new currency supported by as Germany did not have enough gold?
A mortgage on all industrial and agricultural land
How did the government prevent inflation reappearing once the new currency was launched?
Kept tight control over the amount of money in circulation
When did the rentenmark become the Reichsmark?
August 1924
As reichsmarks were backed by German gold reserves, how did they have to be maintained?
At 30% of the value of the Reichsmarks in circulation
How did Stresemann cut government expenditure?
• Salaries of government employees were cut
• 300 000 civil servants lost their jobs
Who did Stresemann raise taxes for?
Individuals and companies
What happened to companies that were reliant on credit after taxes were raised?
Crumbled
What did the number of companies that wefe bankrupt in Germany raise to:
____ in 1923 to ____ in 1924
233 in 1923 to over 6000 in 1924
Who was Charles Dawes and what did he agree to?
An American Banker, a new committee’s chairman that was focussed on Germany’s repayment concerns
Agreed to the Dawes Act
When was the Dawes Act agreed and when was it to end?
Agreed in 1924, ended in 1929
What was accepted in the Dawes Act?
• The amount paid each year by Germany to be reduced until 1929
• Germany pay 1000 million marks at first
- Increased by 2500 million marks per year over 5 years
- After payed according to German industrial performance
• Germany recieve a loan of 800 million marks from USA for investment
What were the consequences of the Dawes Act?
• The French gradually left the Ruhr during 1924-25
• Germany built new machinery, factories, houses and jobs were created
What backlash was there to the Dawes Act?
• Stresemann did not like it
- Thought of it as an ‘economic armistice’
• DVNP and small right-wing groups opposed it as they believed Germany should refuse to pay reparations at all
Who was Owen Young and what plan did he agree to?
He was an American bussinessman who headed an international committee
The Young Plan
What year was the Young Plan introduced?
1929
What was agreed in the Young Plan?
• Germany to pay reparations until 1988
• Reparations ended up only bring £1.8 billion instead od £6.6 billion
• Annual payment increased
• Responsibility for paying reparations solely on the German government
What was the consequence from the Young plan?
• Britain and France agreed to withdraw all their troops from the Rhineland by June 1930
What was the backlash from the Young Plan?
• DVNP leader Hugenburg launched a nationwide campaign against the plan which included other conservative groups such as Nazis
- Hugenburg launched a petition before this that got 4.135 million signatures
- Made it go through to Reichstag to get referendum
- Created the ‘freedom law’ and a referendum made where people voted for the freedom law - 13.8% of public wanted it
In 1927, real wages increased by ___ and in 1928 they rose by another ___
9% 12%
How many strikes were there in 1924 then in 1930?
1924: 1973 strikes
1930: 353 strikes
What was compulsory arbitration and how did it decline strikes?
Both sides on a dispute agree to allow an independant figure decide a solution, often sided with the employees
Why was compulsory arbitration unliked by employers?
They felt that this system was biased and in favour of unions and resented the state’s interference in their affairs
Who did cartels form between and how many were there by 1925?
Between big and small industry firms
~3000 cartel arrangements in operation
What percentage of Germany’s coal and steel production were in cartels?
90%
How many dwellings were built in 1925, how much more was this than the previous year? How many more wer built in 1926?
178, 930 ( approx 179 000) build in 1925
Over 70 000 more than previous year
205, 793 (approx 206 000) homes built in 1926
When could Germanystart to introduce tarrifs and under what conditions?
Could introduce tarrifs on imported foreign goods after 1925
Under terms of the Treaty of Versailles
In what industries were advances made?
Chemical industry - artificial fertilisers
Cars & aeroplane industries
