Germany unit 2 - The recovery of Germany 1924-1929

Question 1

Gustav Stresemann & Great Coalition Government

Answer 1

• Gustave Stresemann becomes chancellor in 1923
• Created ‘Great Coalition’ government - solved hyperinflation and saved economy
• Was chancellor for just 4 months before becoming foreign secretary
• Foreign secretary until October 1929 - death

Question 2

Hyperinflation solutions

Answer 2

• Mark was worthless
• Temporary solution - rentenmark
• Rentenmark value based on Germany’s industrial and agricultural worth
• Would exchange notes for shares in German land or industry if it failed - gave Germans confidence
• 1924 - Reichsbank created to control new currency
• Reichsmark introduced to replace rentenmark - new permanent currency

Question 3

Dawes Plan 1924

Answer 3

• USA loaned Germany 800 million gold marks - massive industry boost
• Reparations lowered to 1,000 million marks for first 5 years and would then increase to 2,500m marks
• Allies agreed to review payment rate over time to take account of Germany’s economic situation & ability to pay
• French agreed to withdraw troops from the Ruhr & future missed payments would be dealt with by allies together
• Allies given some control of Reichsbank & railways in Germany
• Led to over next 6 years, Germany receiving more than 25b marks in loans

Question 4

Extent of German economic recovery

Answer 4

• Industrial output doubled 1923-1929
• Wages rose, cost of living went down & standard of living increased
• Government was able to build new roads schools and public buildings
• 1927 - new laws introduced to allow people to claim unemployment benefit and ‘labour exchanges’ set up for people to find work
• Left economy dependent on US economy
• Wall Street crash - 1929

Question 5

Young Plan 1929

Answer 5

• Total reparations bull reduced to $8 billion
• Payments to be made over 59 years at a rate of $473 million per year
• Germany only obliged to pay a third of annual sum each year - pay rest if it could afford to do so
• French agreed to leave Rhineland by June 1930 - 5 years before agreed 1935
• Allowed Germany to reduce taxes and release funds used to boost the economy
• Referendum held December 1929 to accept or reject plan - only 14% wanted to reject
• Eventually was worthless due to Wall Street crash - 1929
• USA couldn’t afford to loan money to Germany - German economy crashed - Allies agreed to suspend reparations payments - Hitler comes to power and doesn’t pay reparations

Question 6

Locarno Pact 1925

Answer 6

• Germany, France, Belgium, Italy, UK, Czechoslovakia & Poland
• All countries agreed to not settle disputes with military unless in self-defense
• Reassured Germany’s Western border
• Germany agreed Alsace-Lorraine would be French and French agreed not to occupy the Ruhr again
• Germany would settle easter border disputes - Poland & Czechoslovakia - through League of Nations
• Showed Germany was being included more
• Stresemann awarded Nobel peace prize - 1926

Question 7

League of Nations - 1926

Answer 7

• Formed in 1920 after WW1 - made by Woodrow Wilson
• US didn’t join - didn’t want to be involved in European politics
• September 1926 - Stresemann persuaded powers to allow Germany to join League of Nations after signing Locarno Pact
• Helped give a positive image to Germany

Question 8

Kellogg-Briand pact 1928

Answer 8

• August 1928
• 62 countries including Germany signed
• Aim to prevent future wars - promise to not use military forces to settle disagreements
• Showed how Germany was being more included and gave German public more confidence