Reacting To Economic Challenges 1918-1932 Flashcards

1
Q

What can you judge the strength/weakness of an economy on?

A

Trade
Inflation
Growth: GDP
Employment
Redistribution of wealth: class, welfare system, living standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What was Germany;s economy like following WW1?

A

-high inflation
-poor living standards due to reparations
-lack of money and resources
-perceived as worthless

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What were Germany’s 4 economic problems?

A

Debt : Germany debt = 144,000 million marks, currency lost over 1/3 pre war value
Industrial potential : Germany’s industry potential was severely crippled by loss of Saarland and Upper Silesia
Investment : Germany had little hope of attracting foreign investment when capital was in short supply
Reparations : total liability of £6,600 million, annual payments equivalent to 1/4 of all German exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What were the positive elements of Germany’s economy after ww1?

A

-export trade increased
-unemployment fell sharply
-working class benefitted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Weimar’s post ww1 war debt

A

-1914-1918 government borrowed almost 150 billion marks, government raised around M7/M8 billion in taxes which was enough to pay interest of debt but not enough to reduce it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Weimar’s pose ww1 reparations

A

ToV forced Germany to pay reparations. Inter-Allied Reparations commission of 1921 set figure of £6,600 million. Germany could pay this back by sending goods such as coal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Weimar’s post ww1 loss of income

A

ToV meant Germany lost territory. German coal productions declined by more than 15%. Lost almost half of deposits of iron-ore. Economy = less profitable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Weimar post-ww1 unemployment

A

6 million soldiers left the army during 1919 = knock on effect for women who were sacke to allow returning soldiers jobs. February 1919 = 1.1 million without jobs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Economic effects of hyper-inflation

A

-industrialists enjoyed cheap credit
-landowners and middle class house holders paid off their mortgages in inflated currency
-homeowners + pensioners = incomes evaporated by scale of inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Social effects of hyperinflation

A

-workers benefitted it middle class didn’t as inflation wiped out their savings
-health conditions plummeted, infant mortality rates increased, average lifespan declined, disease spread easily

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Political effects of hyperinflation

A

-industrialists blamed workers for high wages
-everyone blamed civil servants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Who suffered from hyperinflation?

A

Middle class as their savings were wiped out. Working class benfitted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What was hyperinflation caused by?

A

Government printing more money in order to pay striking workers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What did hyperinflation cause?

A

Uprisings as groups wanted to take power from government, people could pay off loans, loss in savings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Problems from hyperinflation

A

-passive resistance was costing the government too much
-government spending too much money
-currency had become worthless

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What were Stresemann’s solutions to the problems of hyperinflation?

A

-introduced policy of fulfilment
-initiated deep cuts in public spending
-introduce a new currency called the Rentenmark

17
Q

What were the effects of the solutions to hyperinflation?

A

-German miners would return to work and provide French with the coal they demanded = Germany would make reparation payments.
-didn’t have to pay workers as much money = less reason to print money so economy is not flooded
-new currency was extremely successful as regular forms of trading and payment able to restart

18
Q

What does ‘turmoil’ meaning?

A

Period of confusion or chaos

19
Q

How can you judge how strong an economy is.

A

Growth rate of GDP

20
Q

What features of Weimar economy could be considered turmoil/couldn’t?

A

-hyperinflation
-debt

Couldn’t = benefits to working class

21
Q

What was Dawes plan and who suggested it?

A

Stresemann, it was an economic alliance with the USA = hoped would lead to reductions in economic bill.

22
Q

What did Stresemann believe?

A

-germany would be 3rd power with a sophisticated economy
-Britain and France would be dominant powers due to economic strength
-USA would stand in the way of french demands for reparations
-Germany could not rely on military power to secure position in the world

23
Q

How did Dawes plan transform Germany’s reparation payments?

A

-Germany received a loan of 800 million gold marks provided mainly by US business leaders
-annual repayment amount was reduced by 1929
-repayments allowed over a longer period of time to reduce annual reparations bills

24
Q

How does Dawes plan work?

A

-USA gives loans to germany
-Germany pays reparations to Britain and France
-Britain and France repay war loans to the USA

25
Q

What was the impact of Dawes plan?

A

-solved Germany’s immediate reparation problems
-by late 1920s, German GDP had recovered to its 1913 level and tax revenues were increasing = government used this money to invest in public work schemes, sports arena, public swimming pools etc

26
Q

How can you measure living standards?

A

-employment statistics
-access to health care
-‘real’ wages

27
Q

Positives of living standards

A

-2.8million homes were built in 1919-1932
-increase in retailing and service jobs
-number of women in workforce expanded

28
Q

Negatives of living standards

A

-farmers suffered a severe fall in come from 1926 onwards
-depression years 1929-32 = high unemployment, falling wages, working class were hard hit
-effects of ww1 = malnutrition, infectious disease, war wounded

29
Q

Positive aspects of the Weimar economy

A

-workers pay increase by 37.5% between 1924-9
-1925, chemical industry producing 1/3 more than 1913

30
Q

Negative aspects of the Weimar economy

A

-1918 : 150 billion marks in debt
-1929 : 5.6 million unemployed
-decline in agricultural productivity and growth

31
Q

Economic and social consequences of the depression

A

-decline in industrial production and agricultural prices
-collapse of 5 major banks in 1931 meant 50,000 businesses went bankrupt
-widespread poverty and homelessness creating dependence on charities

32
Q

What was Bruning’s main priority?

A

End reparation payments and persuade Britain and France to drop their reparation demands

33
Q

What was the Hoover Moratorium of June 1931?

A

Suspended payments so the German government had more money to spend

34
Q

What was Bruning’s short term plan?

A

Allow crisis to deepen so he could ensure not just suspension but cancellation of reparations = greater budget cuts + passed a decree lowering wages to 1927 levels

35
Q

What were the success of Bruning?

A

Despite commitment to public spending, initiated a small public works scheme in 1931 focusing on road and canal construction.

36
Q

What was the success of Von Papen?

A

Expanded initiative further, increasing budget from RM 167 million to RM302 million in September 1932, emphasised indirect measures such as giving tax cuts to firms that employed new staff

37
Q

Success of Von Schliecher?

A

Continued existing initiatives but believed direct intervention was necessary. = established a Rm 500 million emergency fund to employ people, carry out repairs works, road and canal maintenance