ECONOMIC DEVELOPMENTS 1924-28 Flashcards
How was the currency in Germany stabilised?
Ending passive resistance in 1923 meant the government didn’t have to pay workers on strike
introduction of new currency the rent mark backed by a mortgage on all industrial and agricultural land.
The government kept a tight control over the amount of money in circulation to stop inflation getting out of control again, Stresseman government spending and raise taxes in order to reduce government debt
What is this era of Weimar considered?
The golden age
Did everyone thrive under this new currency?
Not all companies strived those that were well managed and avoided excessive debt were able to prosper
those that relied heavy credit went out of business.
The number of bankruptcy showed sharp increase in 1924
people who had lost their savings in hyper inflation crisis gain nothing from the introduction of the new currency.
Which individuals helped to stabilise the economy?
Schact
Stresseman
What did long-term stabilisation depend on?
The reparations issue
What was done about the reparations issue?
In November 1923 Stresseman asked the allies reparation committee to investigate how reparations issue could be resolved
= DAWES PLAN
What was the Dawes plan?
The total reparations still remain unchanged. The annual payments were introduced for this period of 1924 to 1929
a loan of 800 million mark from the USA would fund investment in the German economy and therefore help stimulate economic growth. The allies took controlled over Germany bank and railway.
What did the right wing think about the Dawes plan?
Attacked the government for agreeing to the plan arguing that Germany should defy the unjust treaty of Versailles and refused to pay any reparations
however Stresseman believe that Germany had no alternative to excepting the plan and privately he called it no more than economic armistice
How could you argue there was economic recovery?
There was extensive foreign investment in industry
industrial output grow inflation was low and the currency was stable.
Exports increased wages for industrial workers
Less strikes as government introduced compulsory arbitration
How could you argue that was economic weakness?
Unemployment was a problem by 1926 3 million people out of work
imports in increased more than exports
farmers suffered from low prices and high debts
reliance on foreign loans
What was the young plan?
Total bill was reduced from 6.6 billion to 1.8 billion
annual payments were increased
the repayment period was set at 59 years
allied control of the banks and railways were finished.
Allied occupation forces were to withdraw from the rhineland by June 1930.
What did hugenberg organise as a result of the young plan?
National campaign against the plan and gave Hitler a leading role.
This succeeded in forcing the government to put their freedom law which would require the government to repudiate the war clause of the treaty of v to a referendum
but was rejected by the majority.
