Germany - Weimar Economy Flashcards
What was the main German economic problem?
Inflation
What other wartime issue compounded inflation?
Shortages
Why did govt expenditure remain high after the war?
They had to support widows, veterans and millions of demobilised soldiers
How did reparations worsen the economy?
- Most reparations had to be paid in gold or foreign currency
- As German currency weakened paying became an ever worse issue
- By 1923 they were fucked
How did the Allies respond to German failure to meet reparations?
In 1923 French and Belgian governments invaded the Ruhr
How did workers in the Ruhr react to the invasion?
Followed a policy of passive resistance
How did passive resistance worsen the German economy?
They paid owners compensation for lost revenue and still paid the workers
How did the Germans meet reparations?
Printed more money
What did printing massive amounts of money lead to?
Hyperinflation
How much money was being printed?
300 paper mills and 150 printing presses printing money 24 hours a day
How did hyperinflation impact normal Germans?
- Saw savings eradicated
- Standard of living dramatically reduced
- Debtors benefitted as their debts were wiped away
How did Stresemann solve the 1923 crisis?
- Called off passive resistance
- Restarted reparation payments
- Negotiated the Dawes Plan
- Worked with Schacht and Luther to resolve inflation
How did Stresemann solve inflation?
Created a new currency the Rentenmark with one worth one trillion of the old one. They linked it to German industrial and agricultural assets.
What did the Dawes plan do?
- Reduced payment to 1 million
- An international loan made available to Germany
How did living standards improve from 1924-30?
Wages rose every year
By 1928 how had the German economy improved?
- Production equalled 1913 levels
- National income 12% higher than 1913
- Unemployment was very low
- Inflation was low
- 25.5 billion marks loaned to Germany
What were negative features of the Germany economy from 1924-29?
- Agriculture in recession from 1927
- Large dependence on US
- Unemployment never below 1.3m
- Not as high performance as UK and France
- High tension between workers and business owners
What did Stresemann say in 1929 about the German economy?
Dancing on a volcano
When was the Young Plan?
1929
What was the impact of the depression?
- National income shrunk by 39% from 1929-32
- Unemployment rose to 6 million by 1932
- The US had less of a need for imports
- 50,000 business bankrupted by 1932
How did Mullers Grand Coalition fail?
Couldn’t agree on how to solve unemployment and Hindenburg wouldn’t back Muller over this issue.
How did Bruning fail in his response to depression?
- Was forced to use Article 48
- Policies of cuts and austerity
- Was too focused on fixing reparation payments
How did Weimar response to the depression help Hitler
They increased the crisis of democracy and made Hitler a viable option.
When did Germany join the League of Nations?
1926
What did the Treaty of Berlin do?
Helped USSR relations
What did the Young plan do?
Reschedule payments
What were benefits of Stresemanns policies?
- Created credibility for Germany
- Improved living standards
- Increased political stability
What did the Kellogg-Briand pact of 1928 do?
Renounce use of force to solve conflict
How did Stresemann’s death in 1929 impact Weimar?
Their mastermind behind US backing wasn’t there to deal with the crisis
