GOLDEN AGE

Question 1

What was one of the key reforms implemented by Stresemann?

Answer 1

End passive resistance

This reform aimed to stabilize the German economy by ceasing non-cooperation with the Allied forces.

Question 2

What new currency was created during Stresemann’s reforms?

Answer 2

Rentenmark

The Rentenmark was introduced to address hyperinflation and restore confidence in the German economy.

Question 3

What was a significant goal of Stresemann’s reforms?

Answer 3

Balance the budget

This aimed to create a sustainable financial environment in post-World War I Germany.

Question 4

What was one of the terms of the Dawes Plan?

Answer 4

Temporary reduction of annual repayments

This provided immediate financial relief to Germany while restructuring reparations payments.

Question 5

What loan amount was included in the Dawes Plan?

Answer 5

800m mark loan

This loan was intended to help stabilize the German economy and facilitate reparations payments.

Question 6

What was a key aspect of the Dawes Plan regarding supervision?

Answer 6

Allied supervision of German State Bank

This aimed to ensure financial stability and proper management of reparations.

Question 7

What was a significant outcome of the Dawes Plan in relation to foreign troops?

Answer 7

French/Belgian troops leave the Ruhr

This withdrawal was part of the agreement to ease tensions and stabilize the region.

Question 8

Why were interest rates kept high in Germany even after the introduction of the

Answer 8

By 1925: Germany appeared more stable and prosperous
Combination of the new currency, the Dawes Plan and Schat’s work at the Reichsbank (where interest rates were kept high to attract foreign investment), helped improve Germany’s situation enormously

Question 9

What is compulsory arbitration?

Answer 9

industrial disputes are often settled by arbitration in which both sides agree to allow an independent figure (known as the arbitrator) decide on a solution

Question 10

Why were interest rates kept high in Germany even after the introduction of the new currency and Schat’s work in the Reichbank ?

Answer 10

By 1925 interest rates were kept high to attract foreign investment), helped improve Germany’s situation enormously. American loans stimulated economy which made Germany more prosperous.

Question 11

What is rationalisation and cartelisation ?

Answer 11

rationalisation (making industry more efficient) and cartelisation (merging large firms into giant cartels) e.g. I.G. Farben, Krupp A.G.

Question 12

How did rationalisation improve the economy?

Answer 12

Extensive ‘rationalisation’: New management and production techniques were introduced. Old machinery was replaced with new machinery. With American finance and Industrial output grew (but slowly)
Strikes decreased due to compulsory arbitration

Question 13

Which industries improved because of economic growth in Germany?

Answer 13

Car and aeroplane industries developed, although cars were still expensive for the ordinary German.
Loans financed: schools, housing, road and public works
Strikes decreased due to compulsory arbitration

Question 14

Why did compulsory arbitration impact the country?

Answer 14

decreased number of strikes
1924 = 1973
1930 = 353

Question 15

What is a cartel?

Answer 15

groups of industries which combined together to fix prices and protect profits

Question 16

How did cartelisation work in Germany?

Answer 16

Big industries bought out/made agreements with smaller firms to make cartels as Germany had to hand over many of its materials as reparations at the end of the war.

Question 17

In 1925 how much of which industry did Germany’s cartel control?
And how many cartel’s where there?

Answer 17

1925: 3000 cartel arrangements (90% of Germany’s coal and steel production)

Question 18

How did Stresemann’s acknowledge Germany’s financial state?

Answer 18

‘The economic position is only flourishing on the surface. Germany is dancing on a volcano. If the short term-loans are called in, a large section of our economy would collapse’.
- he knew Germany’s was in a fragile financial position

Question 19

How did cartels improve Germany’s economy?

Answer 19

Fixed prices
Protected profits
Reduced competition
Allowed profits to be reinvested (eg. research)

Question 20

How many dwellings were built in 1925 & 1926?

Answer 20

1925: 178,930 dwellings built
1926: 205,793 dwellings built

Question 21

How did the Golden Age improve the lives of the regular people?

Answer 21

Money spent on welfare payments and health improvements
Improvements in living standards for those represented by trade unions

Question 22

How much did real wages increase in 1927 & 1928?

Answer 22

1927: real wages increased by 9%
1928: real wages increased by 12%

Question 23

Who are some people who did not benefit from the Weimar Golden Age’s economic recovery?

Answer 23

People in agriculture
white collar workers (middle class)

Question 24

When was the farming crisis and what was the cause?

Answer 24

1920
commonly believed to be a result of high production for military needs in World War I. At the onset of the crisis, there was high market supply, high prices, and available credit for both the producer and consumer.

Question 25

Why were farmers struggling financially?

Answer 25

Worldwide agricultural depression kept food prices low
Easier for farmers to borrow money but led to foreclosures from banks when loans could not be repaid

Question 26

When did grain prices slump for farmers and what effect did it have on production ?

Answer 26

1925/26: global grain surplus and price slump
1928: small-scale riots in protest against foreclosures and low market prices
1929: production less than 75% of pre-war levels

Question 27

In 1926 how much did unemployment rise to?

Answer 27

Dec 1925: unemployment = 1 million
Mar 1926: unemployment = 3 million+

Question 28

Why did unemployment rise in Germany in 1926?

Answer 28

More job-seekers
Public spending cuts
Companies reducing workforces to save

Question 29

How much did the mining population decrease to in 1922-1925 and 1925 - 1929?

Answer 29

1922-1925: mining population reduced by 136,000

1925-1929: mining population reduced by 56,000

Question 30

Why did the mittlestand not get benefit from Weimar economic recovery?

Answer 30

Weimar ‘economic miracle’ did not benefit everyone. The Mittlesland
Middle-class managers, clerks and bureaucrats did not benefit
White-collar workers got no pay rise

Question 31

What was the young plan?

Answer 31

Stresemann agreed to the Young Plan in 1929. This cut the amount Germany had to pay in reparations by ¼ and lengthened the amount of time Germany had to pay. This made payments easier for Germany to make

Question 32

What did stresemann in terms of reparations?

Answer 32

Stresemann (now foreign minister) wanted an international committee to settle the issue
Headed by American businessman Owen Young
Met in Paris in 1929
Schacht represented Germany
Final settlement on the reparations issue

Question 33

What were some of the fine details of the young plan?

Answer 33

Continue reparations payments until 1988
Bill reduced to £1.8 billion (rather than £6.5 billion)
Annual payments increased
Foreign control over reparations ceased (Germany’s responsibility)
Britain and France to withdraw all troops from the Rhineland by June 1930 (if reparations were paid on time)

Question 34

What was the right wings’s reaction to the Young plan?

Answer 34

They were against the TOV and this acknowledged the TOV
Lots of people where against it - it can be seen in the referendum ( a vote by the electorate on a single political question that has been referred to them for a direct decision ) lots of people 413500 signatures for the freedom law ( execution of anyone who signed the TOV and immediate evacuation of occupied areas

Question 35

What was the great coalition?

Answer 35

Replaced by Gustav Stresemann’s ‘Great Coalition’
This coalition was the first to include parties from the left and right - DVP/Centre/DDP/SPD

Question 36

What was stresemannn’s aims when stabilising the economy?

Answer 36

End passive resistance
Issue a new currency
Balance the budget

Question 37

How did the end of passive resistance improve the economy?

Answer 37

Called off in September 1923

 Unpopular and risky move (led to Munich Putsch)

 Stresemann believed there was no alternative

 Stopping paying resisting workers would help with govt. saving

Question 38

How did issuing a new economy improve the economy?

Answer 38

November 1923: Rentenmark introduced to replace Reichsmark

 1 Rentenmark = 1 trillion Reichsmarks

 Supported by mortgage on all industrial and agricultural land (due to no gold to back it up)

 Govt. controlled how much in circulation

 Old marks gradually collected

 August 1924: Rentenmark becomes new Reichsmark – now backed by gold reserve (30% of RM value to
guarantee stability)

 All monitored by Hjalmar Schacht (German economist)

 Those who lost savings with the collapse of the old Reichsmark gained nothing from the new currency

Question 39

How did balancing the budget improve the economy?

Answer 39

Cut spending and raised taxes (for people and companies)

 Govt. employee salaries cut

 300,000 civil servants lost jobs

 Confidence grew as govt. debt fell

 Well-managed companies were careful not to build up too much debt and so prospered

 Weaker companies that relied on credit crumbled

 No. of bankrupt companies: 1923 = 233, 1924 = 6000+

Question 40

Who was Hjalmar Schacht?

Answer 40

Director of the National Bank from 1916
Co-founder of the DDP Party in Nov 1918
1923: Reich Currency Commissioner and head of the Reichsbank, introduced the Rentenmark
Helped negotiate the Dawes and Young Plans
Nazi Economics Minister: 1934-1937
Removed from the Reichsbank in 1939

Question 41

How did the Daws plan help improve the reparations issue?

Answer 41

The stablisation of Germany’s economy came down to settling the reparations issue. Nov, 1923: Stresemann asked the Reparations Committee to set up a group of financial experts to examine Germany’s situation
American banker Charles Dawes chosen to head the new committee
Apr, 1924: Dawes established a plan to help get Germany’s economy back up on her feet and thus fulfil her payments to France (which then went to the US due to loan agreements)
Stresemann (now foreign secretary) took much credit for the plan

Question 42

Who was Charles Daws?

Answer 42

American banker and politician

US Vice-President in 1924

Helped resolve the reparations issue

Creator of the Dawes Plan

He and Stresemann won the Nobel Peace Prize in 1925

Question 43

What were some terms of the daws plan?

Answer 43

A temporary reduction in the annual reparations repayments to £50 million.
US banks and businesses offered loans worth 800 million marks to German industries and businesses.
The German State Bank, the Reichsbank, should be reorganised and supervised by the Allies.
French and Belgian troops would evacuate the Ruhr

Question 44

What were some of the conditions for the daws plan?

Answer 44

Mainly DVP and Nazi party were against it- believed that Germany should defy TofV all together and refuse to pay for reparations
German economic rebuilt
France left the Ruhr once it became clear that Germany was going to restart paying reparations and the occupation could no longer be justified
Led to German optimism that the country was once again its own master

Question 45

What were some of the benefits of the Daws plan?

Answer 45

Heated debate in the Reichstag
Privately, Stresemann believed it to be an economic armistice
Nationalists believed it only fuelled the Treaty of Versailles
Allies accepted Germany had reparations problems
Loans were guaranteed
New machinery, factories, houses and jobs could allow economic rebirth
French gradually left the Ruhr (1924-1925)