Economic Recovery and Developmentunder Stresemann Flashcards
What was Stresemanns coalition?
The ‘great coalition’ included parties from the left and right that took over during political and economic difficulty
What state did Stresemann leave the Weimar Republic in?
After just 103 days as chancellor the currency was stabilised, inflation was under control and attempts to overthrow the government had ended in failure.
What did Stresemann do to end hyperinflation?
Ended the passive resistance
Issued a new currency called the Rentenmark
Balanced the budget
Ending of passive resistance (3)
Called off in September 1923
Unpopular move that led to Beer Hall Putsch
Government stopped paying workers who refused to work for the French
Issuing the new currency (4)
The Rentenmark replaced the worthless Reichsmark in August 1924
Old inflated marks were cashed in (1 Rentenmark was 1 trillion Reichmarks)
Government kept tight control of the amount of money in circulation to prevent inflation reappearing
Inflation ceased to be a problem and was all under direction of Schacht
Balancing of the budget
Expenditures were cut and taxes raised for individuals and companies (6k companies went bankrupt in 1924)
Confidence restored as government debt fell
Those who lost their savings in the collapse of the old currency gained nothing from the new currency
What did Stresemann agree to begin repaying in 1923?
Reparations
What did Stresemann negotiate with the USA in 1924?
The Dawes Plan
What was the Dawes Plan?
Confirmed 6.6 billion as reparations but made them more manageable
Proposed Germany to pay 1000 million marks a year which gradually increased over 5 years
Germany should receive a loan of 800 million marks from the USA to help get the plan started
Impact of the Dawes Plan (3)
It meant the reparations would be paid off over a longer period of time
Granted loans could be spent on new machinery, factories and houses to rebuild economy
French left the Ruhr so Germany was once again its own master
What evidence was there of an economic recovery during this period?
- By 1928, Germany’ production was back to pre-war levels
- Wages for industrial workers had increased by 9% 1927 and a further 12% in 1928
- Number of strikes had dropped from over 1900 to 700 1924-28
Limits to the economic recovery
US loans - which could be recalled at any time
Unemployment - 1925 1 million were unemployed rose to over 3 million by 1926
Mittlestand and white collar workers gained very little in ‘golden age’
Agriculture and economic recovery
Farmers gained very little
In 1923 it was made easier for farmers to borrow money but they became saddled with debt
Many lost land and went bankrupt
When did Stresemann die?
October 1929 - a few weeks before the Wall Street Crash
Reparations Issue and the Young Plan
Dawes Plan was only a temporary settlement
Young Plan obliged Germany to pay reparations until 1988 and figure was revised to 1.8bn from the 6.6 in 1929
Freedom Law
Young Plan inflamed nationalism
Freedom Law demanded a national referendum
14% of people voted for freedom law indicated depth of support for right wing nationalism
Overall, how successful was Stresemann in economy
He was successful to an extent. He swiftly dealt with hyperinflation and was instrumental in helping Germany’s economy recover - but that recovery was reliant on US loans. When they were recalled in 1929 following the Wall Street Crash, Germany was hit particularly badly.
