Frontsheet 2 Flashcards
Steps for economic stability (1)
End Ruhr Crisis
Sept 1923 passive resistance ends
Reparations begin again
Ruhr productive again
(essential to economy)
Not paying striking workers
Steps for economic stability (2)
Balance the budget
Spending cut
Taxes rasied
Steps for economic stability (3)
Issue new currency
Nov 1923
Stressemann & Schact
issue Rentenmark
1 RTM = 1T RCM
Money in circulation tightly controlled
By 1924 currency stabolised & inflation no longer problem
Reichsmark reissued
Savings remianed lost
Dawes Plan background
1924
Stresemann asked Allied ReparationCommittee to address repayment concerns
Owed France reparations
US wanted Britain & France paid so they could repay US war loans
Dawes Plan key agreements
Total reparations not reduced
Next annual instalment reduced to 1B marks
to gradually increase over 5 yrs
then based on industrial performance
Recieve 800M mark loan to start paln &invest in industry
Dawes Plan impact
Allies accept unable to pay
fulfillment succesful
French gradually left Ruhr
Loan helped begin economic recovery
Increased optimism for future
Right attack - believed reject
Stresemann saw as ‘economic armistice’
only agreed for loan
Young Plan background
1929
Intended to be temporary
Allies still in Rhineland
Reparation repayments stopped after Wall Street Crash
Young Plan key agreements
Total reparations reduced to £1.8B
Annual instalments increased over time
paid until 1988
Allied troops withdraw from Rhineland by 1930
Young Plan impact
Angered right
Hugenberg (DNVP leader)
& other right groups (inc. NSDAP)
launch national campaign for
‘freedom law’ - force gov reject Clause 231
Rasied enough support for referendum & Reichstag debate
Both voted against
but 13.8% voted for
Economic recovery
Investment
Positive:
1925-30 25.5B marks foreign investment
enable industrial reconstruction
Schact kept interest rates high
to attract foreign investment
Negative:
Foreign investment fell after 1929
Became reliant on short term foreign loans
not long term investment
Economic recovery
Industrial development & economic growth
Positive
National income 12% higher 1928 than 1913
Industry underwent ‘rationalisation’ (new methods/management/machines)
Advances in some industries eg. chemical/automobile/areoplanes
c. 90% coal & steel produced by cartels by 1925
increased profits
After 1925 tariffs on imports
many industries supported by gov subsidies
Economic recovery
Industrial development & economic growth
Negative
Economic growth unsteady
Growth 1924-5 & 1927
Cartels,tariffs & subsidies harmed competition
industry less efficient
ineffective industries artificially supported
Growth did not meet 1913 levels until 1929
Economic recovery
Standard of living
Postive:
Industrial workers wage increased
1927 real wage increased 9%
1928 increased 12%
Negative:
Mittelstand didn’t enjoy wage increases
some industrial workers earn more than white collar workers
Trade unions kept industrial wages artifcially high
reduced profits & middle-class income
Economic recovery
Industrial persuits
Postive:
Strikes decreased
1972 (1924) -> 351 (1926)
partly because arbitration made compulsory
Negative:
Strike action fluctuated
844 (1928)
Arbitration not always work
1928 workers in Ruhr ‘locked out’ after arbitrator said wages should increase
Many employers angry at state interference in working condtition
Economic recovery
Unemployment
1M unemployed end 1925
over 3M unemployed 1926
c. 1M 1928
Many companies began reduce workforce
Economic recovery
Agriculture
Positive:
Tariffs on food goods protected farmer’s profits
Negative:
Worldwide agricultureal depression
1929 production level <3/4 1914 levels
1923 gov made easier for farmers to get loans
many owed money could not repay
banks took farms & evicted
1928 series of farmer’s riots
Welfare Reforms 1919
Working days limted to 8 hrs
established in law & prevented employers exploiting workers
helped cut accident at work
unpopular with industrialists - affected profits
Government took responsiblity for aid of injured soldiers
helped thousands of veterans who faced homelessness & starvation
from lack of employment
popular with nationalists
Welfare reforms 1922
National Youth Welfare Act
required all local authorities to provide child protection & education
established legal necessity for each state to protect vulnerable children from abuse & neglect
compulsory all children entitled to free education
helped thousands achieve basic literary levels
Welfare reforms 1924
Public Assistance System
provided more extensive & easier to access support for those in extreme poverty
helped avoid malnutrition & homelessness
Welfare reforms 1927
National Insurance System
provided essential income
helped tens of thousands of families
who faced homelessness due to loss of employment
helped avoid destitution
Negative impact of welare reforms
Expensive to implement
before 1922 solution print more money
after 1924 taxes increased - unpopular
Tried to reduce costs through means tests
many felt humiliated (especially veterans)
indermined support in gov
Living standards
The poor
Experienced most change & benefit for welfare reforms
Loans helped finance public works programmes
benefitted from imporved availablity of services & jobs created
18.4% working class unemployed 1926
reduced income & living standards for 2M families
Means tests deterred manyfamilies from applying - led to abject povety
Living Standards
Working class
Constitution enshrined trade union powers- often supported workers overemployers
1919 Health Insurance Scheme extended to dependent women &disabled people
Increased wages
Many working days lost to stikes - lost income
Rationalisation meant many industries reduced workforce
high unemployment in some towns
Living Standards
Mittelstand
Hit hardest by hyperinflation
never regained level of wealth & living standard
Not recoup lost of hyperinflation
Most civil servants lost jobs & had wages cut
Taxs for indivudals & businesses increased
hit small business owners
Unemployment levels included soem skilled workers
Living Standards
Industrialists
Most big businesses signifficant improvement in demand & profit after 1924
End hyperinflation brought confidence & better climate for business
Benefitted from improved trading position
Unemployment shows companies lacked demand &profits were falling
Increased taxes after 1924 damaged profit
Living Standards
Farmers
Did not benefit from reforms
& remained in state agricultural depression
Tariffs on food imports had limited but positive impact on demand
Increased taxes imposed a burden
Many owed money counld not repay
banks took farms & evicted farmers