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Part one: Empire to Democracy > Economic Developments > Flashcards

Economic Developments Flashcards

1
Q

How did the government of the Kaiser Reich finance the war?

A
  • decided against imposing new taxes or raising money by increasing taxation of the wealthy
  • issues treasury bills and war loans
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2
Q

How did the Kaiser Reich government ensure economic stability throughout the war?

A

government put more money into circulation abandoning the link between paper money and gold reserves

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3
Q

How did the Kaiser Reich’s government when creating economic war plans effect the Weimar Republic?

A
  • circulation of money increased from 2000 million in 1913 to 45,000 million by 1919
  • National Debt (caused by treasury bills) grew from 5000 million to 144,000 million
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4
Q

What did defeat in war mean for Germany’s economy?

A
  • ended hopes of repaying its debts from annexations and reparations
  • treaty of Versailles harsh terms = plundered industry and resources which largely impacted the economy
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5
Q

Why did the Weimar Republic not want to use devaluation?

A

fear of political repercussions

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6
Q

Why did Germany desperately need a thriving economy?

A
  • to rebuild industry
  • re-start trade
  • maintain pay for civil servants
  • meet the post-war demands for pension and welfare benefits
  • pay compensation to those who lost land under ToV
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7
Q

Why was allowing post-war inflation deemed wise?

A

stimulated economic activity and unemployment rates were relatively low - encouraging investment

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8
Q

How did elites benefit from post-war inflation?

A

by taking short term loans from Germany’s central bank to expand their businesses & they could repay with the inflated currency

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9
Q

What were some of the hopes/ social expectations that came with inflation?

A
  • hope that the Allies would deem the ToV fine too harsh and lessen it
  • fuelled right wing avoidance of paying taxes as a patriotic show of rejection for the ToV
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10
Q

How much was the Treaty of Versailles reparations fine?

A

£6.6 billion

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11
Q

When was the first instalment of the reparations paid by Germany?

A

1921

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12
Q

What happened to the reparations payments by 1923?

A

Germany fell behind and missed a payment - this caused the French invasion of the Ruhr - after an extension request in 1922

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13
Q

Why did France invade the Ruhr?

A

they were very sceptical of Germany’s financial problems due to the recent treat of Rapallo = economic cooperation with USSR

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14
Q

How did the Chancellor of Germany respond to the French invasion of the Ruhr in regards to reparations?

A

Chancellor Cuno stopped all reparations payments and ordered a passive resistance policy in the Ruhr

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15
Q

How did the Ruhr occupation worsen Germany’s economy?

A
  • paying strike wages was a drain on gov money
  • tax revenue lost from those whose businesses ceased and from workers’ who became unemployed
  • Germany had to import coal that would usually come from the Ruhr
  • Shortages of goods pushed inflation
  • The value of the Mark collapsed
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16
Q

What could the inflation be referred to as due to its severity?

A

Hyperinflation

17
Q

What was the consequence of hyperinflation?

A
  • money became worthless
  • workers had to be paid daily or multiple times a day due to constant increasing prices
  • paper currency spent as fast as possible in order to avoid another surge
  • food shortages
18
Q

Who negotiated the Dawes and Young Plans?

A

Stresemann

19
Q

Who was a key figure in the introduction of the new currency and dealing with inflation?

A

Hjalmar Schacht

20
Q

What was the new currency introduced in 1923?

A

Rentenmark

21
Q

What was different about the Rentenmark compared to the previous Mark?

A

backed by land and industrial resources rather than gold and its supply was strictly limited

22
Q

How were the government taking precautions against hyperinflation happening again?

A
  • stopped offering credit to industry
  • lending rates were controlled
  • new taxes on individuals and companies
  • reducing spending power
23
Q

How did Stresemann and Schacht’s policies help the economy?

A
  • rapid growth in 1924 and 1925
  • number of companies going bankrupt increased - faith in the Reichsbank returned
  • inflation ceased to be a problem
24
Q

What event caused the formation of the Dawes Plan?

A

Stresemann requested the Allies to address repayment concerns through the Allies Reparations Committee

25
Q

What Plan was set up in 1924?

A

Dawes Plan

26
Q

What are the key aspects of the Dawes Plan?

A
  • reparations £6.6 billion remained BUT amount to be payed each year reduced
  • immediate payment of 100 million Marks
  • large loan of 800 million marks from USA
  • sanctions for missed payments must be discussed before action
27
Q

What were the benefits of the Dawes Plan?

A
  • acceptance of concerns from Allies
  • evacuation of French from the Ruhr
  • financial optimism
28
Q

What Plan was negotiated in 1929?

A

Young Plan (Dawes Plan 2.0 - renegotiated)

29
Q

What were the terms of the Young Plan?

A
  • reduced the total reparations bill by 75%
  • reduced the annual payments by expanding the period of payments to 59 years
  • ended Allied supervision of German banking
  • provided determent of payments during economic crisis
30
Q

What are some key industrial developments?

A
  • introduction of new technology
  • recovery of the heavy industry
  • advancements in the chemical industry (often the result of wartime research)
  • expansion of car, aeroplane, and electrical industry
31
Q

How was agriculture effected by the war?

A

suffered greatly due to the loss of ‘unprotected rural labour’ - fields left to women and old men due to conscription

32
Q

What was the most famous agriculture fail due to war?

A

turnip winter of 1916 - population reduced to living on traditional animal fodder - followed by a horrible harvest

33
Q

How was post-war agriculture different from the recovering indsutry?

A

it did not make the same resurgence - faced problems such as foreign imports and low prices caused by worldwide over-production

34
Q

What was the Law passed in 1919 in regards to agriculture space?

A

Reich Resettlement Law = provision for large estates to be redistributed among smaller farmers

35
Q

How did many farmers struggle economically?

A

By 1927-28 farmers were getting little if any return on the cost of running their farms, and yet they faced high tax demands and substantial rents or interest payments on mortgages

36
Q

What were the overall economic weaknesses by 1929?

A
  • relied extensively on foreign credit (Dawes and Young Plan = US loans)
  • economic improvements were not universal (agriculture)

Part one: Empire to Democracy (11 decks)

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