Policies for recovery, 1924-28 Flashcards
Stresemann
August 1923: Stresemann: chancellor and foreign minister; coalition lasted until November 1923, but Stresemann asked to serve as foreign minister in next government
October 1923, policies
Stresemann’s first policy was regain control over money
worthless mark withdrawn, replaced by Rentenmark, emergency money banned (17 Nov)
overseen by Schacht, President of Reichbank in December
restored faith in currency abroad and in Germany
government control over rents, wages and prices stabilised economy through an emergency decree
dawes plan
1924
made reparations easier
reduced annual payment of gold marks to 1M, then 2.5M in 1929
young plan
1929
reduced the total amount of reparations demanded of Germany to 121 billion gold marks, almost $29 billion, payable over 58 years.
foreign policy
Dawes and Young Plan made reparations more manageable and provided loans to rebuild economy
made Germany acceptable foreign power; countries lent money and made agreements
provided stability but meant economic recovery was based on loans; US = ‘the world’s banker’
the recovery of business
big business rode out economic problems
early 1920s, small business collapsed; more bankruptcies in 1924 than past five years combined
cartels
surviving businesses formed cartels; fixed prices to stabilise economy
- biggest was IG Farben set up in 1925, united chemical -based cartels
- many factories rebuilt with new ‘time and motion’ thinking
- 1925: chemical industry produced 1/3 more than 1913
business disputes
strikes and lockouts were common
trade recovery
Difficult to establish trade links with Britain and France at first; shift in worldwide trade set off by US policy of isolationism and led to tariffs on foreign goods
10 September 1925
Germany joins League of Nations
exports back to 1913 levels
Germany produced steal and chemicals other countries needed
agriculture
1/3 - 1/4 of workers were agricultural
bigger farms managed better; small ones in debt
big landowners
big landowners, eg. Hindenburg had political influence allowing him to block farming reforms which were not in his interest
- eg. 1918 Reich Settlement Law that made landowners sell land to government to be redistributed among poor tenants
new economy and government spending
new economy built on short term foreign loans, expected to be renewed when economy improved
government spent heavily; subsidised grain production and industry; spent on social welfare, funded by borrowing and taxation
most people were better off before war, so paid less tax
1913: lowest band of taxpayers was 47%; 1926: 55%
- government had to borrow more money to make up for this
government spending
economy kept afloat by government support
government had its own bank to provide federal and regional funding
industrial expansion and production damaged by constant disputes between business and workers; affected productivity and drove wages up until 1930
october 1929
Stresemann dies
