Economic Development And Policies Flashcards
1
Q
Impact of war on economy
A
- gov had spent all of the gold reserves on the war - had been printing more and more money
- June 1914 only approx 6.3 million marks in circulation
- December 1918 approx 33 million marks in circulation - causing inflation
- at the end of the war - 150 printing forms with 2k printing presses running day and night
- money lost value quickly
- bad for trade - trade had been disrupted by war = businesses suffered + unemployment
- made worse by end of armament production
2
Q
Impact of war on farming
A
- farm production dropped by 20% during the war + industrial output halved
- loss of agricultural + industrial land due to Treaty of Versailles
- black market flourished as goods became scarce
3
Q
Effect of Inflation 1918 to 1923 on prices + wages
A
- cost of goods increased rapidly
- employeurs had reduced wages
- pensioners unable to survive on fixed pensions
- value of money decreasing daily
4
Q
How did the government deal with social welfare
A
- retraining schemes for soldiers
- provided loans to demobilised soldiers until they found work
- set up pension payments for the wounded + widows + orphans
- set up national committees to oversee care in the Länder
- federal gov + Lander provided support
5
Q
Various social welfare programs
A
- in 1920 there were approx 1.5 million disabled veterans + 1.9 million survivors not classed as disabled
- the gov looked after them with a mix of lump sum payments + pensions
- by 1924 the gov was still supporting 800k disabled veterans + 420k war widows + 1 million orphans + 190k parents of dead soldiers
- 10% of the population were receiving federal welfare payments
- many more on regional poor relief
- led to more debt
6
Q
Debt and Reparations
A
- by 1918 the gov owed owed about 150 Billion marks - 3x the amount in 1914
- the policy of reparations from the Treaty of V increased debt
- gov tried to meet the reparations payments + take loans from US
- from 1921 onwards Germany was stuck in negotiations with the Allies about payments
- surtout France felt that Germany was trying to escape payments
- all European countries suffering from economic issues
- until 1924 Germany continued with regular reparation payments - coal + wood + railway carriages
7
Q
What led to French occupation of the Ruhr
A
- Jan 1923 Germany failed to deliver reparation payment in full
- in 1921 it had been decided by the London Ultimatum of the Allies that the Allies would occupy the Ruhr of payments fell behind
- Ruhr important to German economy - coal + industries based there
- 1923 French + Belgian troops occupied the Ruhr
8
Q
Events of the Ruhr occupation
A
- gov stopped payments to France - but not to other countries
- Germans encouraged passive resistance - strike + sabotage + slow work
- French cut of the Ruhr from the rest of Germany - set up border + patrols + control of postal service
French tried to bring in own workers - killed 132 people + expelled over 150k people from their homes
- in 1923 new German coalition gov began negotiations with the french as neither side was benefiting
9
Q
Hyperinflation
A
- Ruhr crisis escalated inflation to hyperinflation - out of control - price increase multiple times daily
- 1 mark newspaper in 1 May 1922 = 100k marks by 1 September 1923 = 700 B by November 1923
- people began to rely on barter + black market - only rich could afford
- those making profit on black market flourished
- towns + regions began issuing their own emergency money - Notgeld
- mass layoffs - 750k federal + regional gov employees
- people on fixed pensions + social welfare suffering
- rich Von Lingans Family had to sell house + servants + move to job in factory - loss of prestige
10
Q
August 1923 Change of Government
A
- August 1923 hyperinflation at worst
- gov collapsed
- new coalition gov with Gustav Stresemann (DVP member) as chancellor
- made use of Emergency Decree of 10 August to postpone Reichstag meetings - most significant policy decision
- the gov acted more rapidly - didn’t need to negotiate with Reichstag
- used Emergency decrees to control rents + wages + prices - to stabilise currency
11
Q
Gustav Stresemann
A
- chancellor + foreign minister in August 1923
- coalition gov only lasted until November 1923
- Stresemann asked to serve as foreign minister in the next gov
- stabilising force - urged compromise
12
Q
Rentenmark
A
- replaced the Mark with the Rentenmark - temporary measure - October 1923
- various forms of emergency money banned
- people complained as Rentenmark worth less than a gold mark
13
Q
Hjalmar Schacht
A
- Hjalmar Schacht oversaw the introduction of the Rentenmark
- Hjalmar made President of the Reichsbank in December 1923
- currency changes restored faith in Germany currency abroad + at home
- Schacht oversaw change to Reichsmark (RM) in August 1924
14
Q
Why was foreign policy vital to the economy
A
- Dawes Plan and the Young Plan made reparations more manageable + provided loans
- foreign policy Treaties like the Locarno Treaty made Germany a Foreign Power again
- economic recovery based on US loans
15
Q
Dawes Plan 1924
A
- sum value of 132 B marks fixed in 1921 as reparations
- over 5 years annual payments would rise from 1 B to 2.5 B then at varying levels
- allies had control over railways + Reichsbank + customs duties
- sanctions for lack of payments must be agreed on by all Allies
- temporary arrangement
- Germany given a loan of 800 Million marks to help stabilise currency
16
Q
Effect of Dawes Plan
A
- helped economic recovery
- led to reparations being paid on time
- no single country could decide on sanctions
17
Q
Young Plan 1929
A
- total sum of reparations reduced to 37 B marks
- annual payments lowered + would be paid over 58 years
- allied supervision discontinued
- intended as the final settlement
- Germany participated in the negotiations
18
Q
Effect of the Young Plan
A
- Allied troops withdrew in June 1930
- major internal opposition
- campaign for a referendum
19
Q
Locarno Pact 1925
A
- Stresemann signed the pact with Britain + France +Belgium + Italy
- acceptance of Germany’s western borders
- all countries renounced use of force + invasion
- reassured France about its borders + reassured Germany about further French invasion
- Germany signed arbitration treaties with Poland + Czechoslovakia - didn’t accept borders though
20
Q
League of Nation 1926
A
- Germany joined the League of Nations in September 1926
- given great power status + ability to veto
- Germany used the position to raise matters of German interest
- Germany not allowed to participate in collective action against aggression
21
Q
Treaty of Berlin 1926
A
- singed with the USSR in April 1926
- had public and secret clauses
- economic + military exchanges
- Stresemann used the treaty to put pressure on the West to imprisoned its relations with Germany
22
Q
Recovery of Business 1924 onwards
A
- small businesses collapsed in the early 1920s
- in 1924 there were more bankruptcies than in the previous five years altogether
- many factories were rebuilt with the latest mass-production assembly lines + time and motion thinking
- by 1925 the chemical industry was production a third more than in 1913 and two thirds more by 1930
23
Q
Cartels
A
- big businesses formed cartels - made agreements to set + control prices
- cartels helped stabilise economy
- some cartels formed associations of shared interests
- biggest cartel association was I.G. Farben - set up in 1925 - united various chemical based cartels
24
Q
Business disputes
A
- disputes between business owners + workers about conditions + better pay
- strikes + lockouts were common
- fewer in 1926-27
- never went away even after they gov setting up state arbitration in October 1923
25
Q
State arbitration
A
- arbitration boards set up in October 1923
- dealt with management of pay + disputes
- after 1924 the boards made more compromise rulings
26
Q
Trade Recovery
A
- difficult for Germany to set up trade links after WW1 due to reputation
- US policy of isolationism made things worse
- many countries introduced tariffs on foreign goods - Germany suffered from heavier tariffs
- Germany was producing steel + chemicals needed by other countries
- German exports back to same 1913 level of 10 B marks by 1926
- by 1929 exports were 34% higher than in 1913
27
Q
Agriculture
A
- approx 25% of all workers were agricultural workers
- bigger farms managed better than smaller farms - invested in new machinery + farming techniques
- many small farmers in debt + couldn’t even pay taxes
28
Q
Political influence of big landowners
A
- big landowners like President Hindenburg had political influence
- enabled them to block land reforms such as the 1918 Reich Settlement Law
- would’ve made landowners sell land to the gov to redistribute amongst the poorer tenants
- strung out negotiations over the land sales
- big landowners pressed for high grain subsidiaries that benefits those with big farms
29
Q
Government spending
A
- the gov subsidised grain production + industry + provided social welfare for the poor
- took loans from US + high taxes
- most ordinary people paid less taxes + disliked tax rises
- in 1913 the lowest tax bracket was made of 47% of the population - 62% by 1926
- 55% by 1928
- economic recovery dependent on loans + gov support
- industrial expansion damaged by constant disputes between owners + workers - lead to wage increase until 1930
- great depression after Wall Street Crash meant that people were willing to work for any wage
30
Q
What caused the Great Depression
A
- in 1929 the Wall Street Crash occurred
- US banks stopped renewing short-term loans
- US called in their loan repayments
31
Q
Effect of Great Depression on economy
A
- businesses sell less goods - have to lay off workers - buy fewer suppliers
- unemployment rises - people have less spending money
- some suppliers + businesses can’t pay off their debts - bankrupt
- people can’t pay taxes + mortgage - lose their homes
- some banks fail - people can’t pay back loans
32
Q
Effect of Great Depression on industry
A
- industrial production fell - by 1932 it was half of that in 1928
- unemployment rose - wages fell by 15%
- prices also fell
