Entire Section 2: Golden Years of the Weimar Republic Flashcards
In order to recover Germany’s economy, what 3 steps did Stresemann take?
1) Germany ended its policy of resistance, which had led to serious unrest in Germany and had led to the attempted Beer Hall Putsch in Munich. Ending passive resistance meant that the government stopped paying workers who refused to work for the French.
2) In November 1923, a new currency, the Rentenmark was brought in. The government kept tight control of the amount of money in circulation in order to prevent inflation reappearing. In August 1924 the Retenmark became the Reichsmark, backed by the German gold reserve.
3) Stresemann’s government cut expenditure and raised taxes. The salaries of government employees were cut, some 300,000 civil servants lost their jobs and taxes were raised for both individuals and companies. As government debt fell, confidence was restored.
How long was Stresemann Chancellor of Germany for?
1) 103 days.
What led to the creation of the Dawes plan?
1) Stresemann had asked the Allies’ Reparations Committee to set up a committee of financial experts to address Germany’s repayment concerns.
2) The USA had a vested interest in getting Germany back to a position where reparations could be made to France, because much of this money was passed onto the US in the form of loans
Who was Charles Dawes?
1) American banker Charles Dawes became the head of the reparations committee.
When was the Dawes plan finalised and what did it recommend?
1) Finalised in April 1924.
2) -Confirmed the original figure of reparations as 123,000 million gold marks.
- Recommended that the amount paid each year by Germany should be reduced until 1929, when the situation would be reappraised. It proposed that Germany should restart reparations by paying 1000 million marks and that this sum should be raised by annual increments over 5 years by 2500 million marks per year. After this, the sum should be related to German industrial performance.
- Germany should receive a large loan of 800 million marks from the USA to help get the plan started and to allow for heavy investment in infrastructure.
What benefits did the Dawes plan bring to Germany?
1) The allies accepted that Germany’s problems with the payment of reparations were real.
2) Loans were granted, with which new machinery, factories, houses and jobs could be provided and the German economy rebuilt.
3) The French gradually began to leave the Ruhr during 1924-25, once it became clear that Germany was going to restart paying reparations and the occupation could no longer be justified, which led to German optimism growing.
What happened to German industrial output after 1924?
1) German industrial output grew after 1924, but did not reach the levels of 1913 u til 1929.
Where were industrial advancements made?
1) Advances were made in the chemical industry, su h as the large scale production of artificial fertilisers.
2) The car and aeroplane industries also developed, although cars were still too expensive for the average German
What did the inflation rate look like in 1924?
1) The inflation rate was close to zero and living standards also began to rise.
What did government loans help to do?
1) Loans helped to finance the building of houses, schools, municipal buildings, roads and public works.
2) Money was also spent on welfare payments and health improvements and in 1924, new schemes of relief were launched.
Why did the number of strikes in Germany decrease?
1) Partly because a new system of compulsory arbitration for settling industry disputes was issued.
What were the limits to Germany’s economic recovery?
1) In a speech given shortly before his death, Stresemann warned ‘The economic position is only flourishing on the surface. Germany is a dancing volcano’.
2) Unemployment had become a continuous problem. By the end of 1925, unemployment had reached one million and by March 1926 it had reached 3 million, although it did fall after that.
What did farmers gain from the economic recovery?
1) Farmers gained very little from economic recovery.
2) A worldwide agricultural depression kept food prices low and few farmers were able to make profit on their land.
What did the government do for farmers after 1923, and were the effects of this?
1) After 1923, the government made it easier for farmers to borrow money.
2) This made matters worse because farmers became saddled with debt at a time when prices were falling and therefore they could not keep up with repayments.
How did governments try to rectify the situations that farmers found themselves in?
1) Governments tried to relieve farmers plight by introducing high import tariffs on food products, import controls and subsidies to farmers, but this did not do enough.