Economic development and policies - Stressman Years (1923-29)

Question 1

How did Stresemann deal with hyperinflation?

Answer 1

• He ordered sharp cuts in government spending to try and reduce the national debt.
• He introduced a new German currency - the Rentenmark - in December 1923
• He negotiated a fixed timetable for Germany’s reparation payments in the Dawes Plan in 1924

Question 2

What evidence is there of a more stable economy under Stresemann 1924-29?

Answer 2

• Certain sectors of the economy prospered - chemical company I.G. Farben became the largest in Europe
• Exports rose by 40% between 1925-29
• Inflation and unemployment reamined low

Question 3

What evidence is there of improved living standards under Stresemann?

Answer 3

Wages rose every year between 1924 and 1929

Question 4

What was the main weakness of the German economy 1924-29?

Answer 4

Germany’s economic recovery was too dependent on the USA - when the effects of the Wall Street Crash and Great Depression hit Germany, credit (loans) dried up and the USA demanded repayments of loans.

Question 5

What evidence is there that the German economy had not fully recovered by 1929?

Answer 5

• Agriculture was in recession by 1927. Farmers’ incomes was 44% below national average
• Unemployment did not fall below 1.3 million and levels were climbing before 1929.
• Overseas trade was sluggish - Germany always imported more than it exported