Economic developments, 1924-29 Flashcards
Who was Gustav Stresemann?
.1923 - Chancellor.
.Took over during hyperinflation crisis.
.Late 1923-29 - Foreign Minister.
.1926 - Him and Briand awarded Nobel Peace Prize.
Define Cartel.
Group of companies from the same industry who combine to protect profits and fix prices - reducing competition but allow more profits to be reinvested.
Define tariff.
Taxes/duties paid on goods entering a country - make foreign goods more expensive so ones produced in the country are protected from competition.
Define economic armistice.
Temporary agreement - suspend action e.g. reparations. Dawes Plan is an example - suspension but not a final agreement.
How was inflation controlled?
.September 1923 - passive resistance ended by Stresemann - led to Munich Putsch, stopped paying non-working workers.
.November - Rentenmark introduced - not enough gold to support so mortgage in industry and farmland used.
.August 1924 - Reichsmark introduced - gold backed it up and 30% value of Rentenmark. Under Schacht.
.Cut spending and taxes raised -300000 jobless ,not too much debt but weak companies crumbled.
How bad was bankrupsy?
.1923 - 233 companies.
.1924 - over 6000.
.Savings not recovered.
How did the Dawes Plan come about?
.November 1923 - Stresemann asks Allies’ Reparations Committee to set up a committee of financial experts to address concerns.
.USA invested as it would benefit them.
.New Chairmann - Charles Dawes.
.1924 - Dawes Plan.
What was the Dawes Plan?
.Confirmed original reparation sum.
.Reduced yearly payments until 1929.
.1000 million marks and increase annually to 2500 marks. After related to industrial performance.
.800 million mark loan from USA for German infrastructure investment.
What were the effects of Dawes Plan?
.Stresemann - only an economic armistice.
.DNVP and right-wing groups opposed/attacked - shouldn’t pay reparations.
.Agreed July 1924 - French left Ruhr.
.Only temporary.
What was the Young Plan?
.Owen Young - American Businessman.
.1929 Young Plan - pay until 1988 but reduced bill greatly.
.£1.8 billion but repayments increased.
.All under German control now.
.June 1930 - Britain and France remove Rhineland troops.
What were the effects of the Young Plan?
.Nazis and DNVP campaigned against it.
.’Freedom Law’ - repudiate war-guilt clause, immediately evacuate occupied areas and try ministers signing treaty for treason.
.Demand referendum - 4,135,000 signatures, defeated in Reichstag debate.
.13.8% electorate supported Freedom Law and Hitler became a national political figure.
.Reliant on short-term loans.
How was industry effected in the short-term?
.1925 - Industrial outputs grew - took until 1929 to reach 1913 level.
.Unsteady growth rates and 1913/4/5/7 - good years despite bankrupcy.
.1928/9 - economy shramk - 1929 - falling investment in factories and machinery.
What happened to big industiralists?
.Bought out smaller ones and formed cartels - 3000 by 1925 - 90% coal and steel production involved.
.After 1925 - Under Versailles - raised tariffs and given state subsidies.
.Chemical, car and aeroplane industries developed - cars still too expensive.
.Inflation rates close to zero, wages and living standards increased.
.Houses, schools, roads etc. built from loans.
.1925 - 178,930 houses built and 1926 - 206,793 homes.
.Health and welfare investments.
What happened to workers?
.Strike numbers declined after compulsory arbitration in place.
.Seen as biased in favour of unions - resented government interference.
.Poor employer/employee relationships.
.Wages increased each year after 1924 - 1927 - 9% and 1928 - 12% and working day to 8 hours.
What happened to the Mittelstand?
.Gained little - bankrupted by hyperinflation.
.Resented industrial workers’ rising wages.
.1920s - drawn with/exceeded middle class wages.
.1925 - Over 1 million unemployed and 1926 - 3 million then fell but not under 1 million - more people looking for work, workforces reduced and public spending cuts.
