Economic Developments Flashcards
Who was Stressemann
Leader of DVP party
Became chancellor in the Grand coalition of 1923 only chancellor for 103 days
Responsible for the introduction of the new currency and ending hyperinflation but forced to step down in November
End of passive resistance lead to
Highly unpopular move ending it
Led to the attempted Beer Hall Putsch in Munich
Ended in September 1923
Ending passive resistance meant that the government stopped paying fo workers who refused to work under the French. Was an essential step to reduce government spending
Issuing new currency
New currency called Rentenmarks introduced
One trillion old marks for one Rentenmark
August 1924 it became Reichmark
Balancing the budget
Cut expenditure and raised taxes
Salaries of government employees cut
300,000 civil servants lost their jobs
Weaker companies crumbled and companies that went bankrupt in Germany rose from 233 in 1923 to over 6000 in 1924
Who was Charles Dawes
An American banker and politician
Became US Vice President in 1924
Him and Stressemen awarded joint Nobel Peace Prize in 1925
What did the Dawes plan recommend
The amount paid each year by Germany reduced until 1929 Germany start repaying by paying 1000 million marks and that sum increased over five years by 2500 million marks per year
Germany should receive a huge loan of 800 marks from USA
Two benefits Dawes plan brought to Germany
Allies accepted that Germany’s problems with the payments were real
Loans were granted with which new machinery factories houses and jobs could be provided
Extent of economic recovery in the industry
1925 Germany more stable and prosperous
Years 1924-1925 were good but economy shrank 1928-1929 and investment in new machinery falling by 1929
5 advances made in the industry
Chemical industry
Production of fertilisers
Car and aeroplane
Cars too expensive for average German still
Inflation rate close to 0
1925 dwellings built
Over 70,000 more than the previous year
1926 were to be 200,000 more homes
Increase in wages
1927 increased by 9% and 1928 rose by a further 12%
Three limits to the economic recovery
Unemployment a continuing problem
Had reached one million start of 1925 and start 1926 now three million
Mining companies reduced their workers
By 130,000 then reduced a further 56,000
Middle classes gained little in the ‘golden age’ by being bankrupt by the hyperinflation
Agriculture in the extent of economic recovery
Gained little
Large landowners had to borrow money to buy new machinery
Smaller land overs hoard their money and their savings wiped out by inflation
Farmers in debt as in 1923 government made it easier for them to borrow money
Government tried to relieve them of stress by introducing high important tariffs on food products but didn’t go far enough
1928 farmers had revenge of small scale riots called ‘farmers revenge’ in protest against low market prices
1929 agriculture production less than three quarters of its pre war levels
Who was Owen Young
A lawyer but became a leading business man
Helped writing the Dawes Plan of 1924
What was the Young Plan
Obliged Germany to continue playing reparations until 1988
Bill reduced to £1.8 billion from £6.6 billion
Annual payment increased
All foreign control over the reparations ended and responsibility for paying reparations was solely on German government
In return Britain and France withdrew troops from Rhineland in 1930
Economic recovery
There was extensive foreign investment in industry
Inflation low and the currency was stable
Exports increased
Wages for industrial workers increased
Economic weakness
Three million people out of work
Imports increased more than exports
Wage settlements increased costs
Farmers suffered from low prices and high debts many farmers forced to give up their farm and rural incomes did not increase
