Policies for recovery 1924-28 Flashcards
1
Q
Gustav Stresemann?
A
- Chancellor and foreign minister in August 1923
- Was a stabilising force in the government urging compromise on political ideas to work together to solve Germany’s problems
2
Q
Stresemann’s first significant policy measures?
A
- Undertaken to regain control over money
- Worthless mark was withdrawn and as a temporary measure the Rentenmark took its place in October 1923
3
Q
Effect of Rentenmark
A
- Currency change had the effect of restoring faith in the German currency both at home and abroad.
- Prices settled
- Government also used emergency decrees to control rents, wages and prices which also helped to stabilise the economy
4
Q
Why was foreign policy vital to the economy?
A
- Dawes plan and Young Plan made reparations more manageable and provided loans to rebuild the economy
- Stressman’s foreign policy moves made Germany an acceptable foreign power again. Other countries were happier to lend Germany money and make trade agreements.
5
Q
Why was this foreign policy approach a risk?
A
- Based on loans from the USA
- Could be dangerous if USA decided to call in the loans (Eventually it did)
6
Q
Problems for businesses?
A
- Early 1920s many small businesses collapsed
- In 1924 there was more bankruptcies than in the previous 5 years together
7
Q
Business recovery?
A
- Surviving big businesses began to form cartels. Fixed prices helped stabilise the economy
8
Q
Trade problems?
A
- Difficult for Germany to establish trade links especially with Britain and France because of bad feeling after the war.
- Germany suffered from heavier tarrifs because of its part in the war
9
Q
Trade recovery?
A
- Germany was producing steel and chemicals that other countries needed
- With Germany’s admission into LON and the other international agreements that Streemann set up German exports were back to their 1913 levels of 10 billion marks by 1926 and by 1929 exports were 34% higher than in 1913
10
Q
Agricultural problems?
A
- Between a third and a quarter of all workers were agricultural workers.
- Many small farms were heavily in debt and could not afford to pay the interest on their loans or even in some cases their taxes.
11
Q
Agricultural problems part 2?
A
- Big landowners such as President Hindenburh had political influence that enabled them to block farming reforms where they did not work in their interst such as the 1918 Reich Settlement law.
- Law made landowners sell land to the government to be redistributed among their poorest tenants. Strung out the negotiations over the land sales.
- Influence of wealthy landowners allowed them to press for high grain subsidies that benefitted those with big farms.
12
Q
Government spending?
A
- Government spent heavily. Subsidised industry and it spent heavily on social welfare. Funded this by borrowing and taxation
- Germans resented idea of tax rises. In 1913 lowest tax band was made up of 47% of taxpayers. Was 62% in 1926. Meant that the government had to borrow money it might have otherwise made by raising taxes
