reacting to economic challenges, 1918-32

Question 1

what were the war time economic issues?

Answer 1

unemployment
war debt
treaty of versailles

Question 2

give a statistic to show unemployment figures due to the war

Answer 2

approx. 6 million soldiers were demobilised (left the war) which led to many women being sacked (they had filled posts during the war)
by Feb. 1919 there were approx. 1.1 million people without jobs

Question 3

give a statistic to show war debt and why was it so high

Answer 3

the govt borrowed vast amounts of money due to the confidence they had Germany would win the war = almost 150bn marks from 1914-18

Question 4

what was the impact of war debt?

Answer 4

led to inflation, and prices rose by 200% during the war period

Question 5

what were the two main economic challenges arisen from the Treaty of Versailles?

Answer 5

reparations and loss of territories

Question 6

what were the reparations?

Answer 6

the Inter-Allied Reparations Commission of 1921 set the figure of £6.6 billion

Question 7

which key territories did Germany lose and what was the impact on the economy?

Answer 7

Saar and Alsace-Lorraine
led to German coal production declining by more than 15% and Germany lost almost half of its deposits of iron-ore

Question 8

what was the German govt’s first response to the amount of war debt, inc. reparations?

Answer 8

the govt tried to meet the payments by borrowing and printing money to try to pay ad Allies back so they tried changing the policy of reparations in 1921 but did not work because France got angry

Question 9

how did Germany started paying reparation payments until 1924?

Answer 9

reparations were paid in coal, wood, and railway carriages

Question 10

when and why was the occupation of the Ruhr?

Answer 10

1923 as Germany failed to deliver its reparation payments in full

Question 11

why was the Ruhr and important region for German economy?

Answer 11

because it was the heartland for coal production and most industries

Question 12

how did the German govt respond to the occupation of the Ruhr?

Answer 12

passive resistance campaign

Question 13

what was passive resistance campaign?

Answer 13

Germany suspended all future reparation payments until the French left the Ruhr but the govt still paid striking workers which meant printing more money

Question 14

what is a statistic to demonstrate the amount of money printed?

Answer 14

during 1923 the govt used 30 paper mills and around 130 print firms to produce notes of higher denominations

Question 15

how did the value of money change during 1923?

Answer 15

in january 1922, the largest banknote was worth 10,000 marks, but by November 1923, the govt was issuing notes worth up to 1 trillion marks

Question 16

what was the main impact of the crisis in the Ruhr?

Answer 16

it escalated inflation into hyperinflation

Question 17

what was the impact of the negotiations made due to the runaway inflation of 1921?

Answer 17

payment ‘holiday’ negotiations made international investors and major banks to lose faith in economy leading to a fall in the value of the mark

Question 18

what was the emergency money called during hyperinflation?

Answer 18

Notgeld

Question 19

how did hyperinflation impact debt?

Answer 19

debt became worthless, and German citizens could pay off loans easily and govt wiped out much of its wartime debt

Question 20

how did hyperinflation affect savings?

Answer 20

savings became worthless - impacted mostly the middle class

Question 21

what was Stresemann’s role and position during the period 1924-28?

Answer 21

he was foreign minister and so played a crucial role in restoring Germany’s international reputation and encouraging foreign investment

Question 22

what was Stresemann’s views on how the German economy would recover?

Answer 22

he believed economic competition would lead to trade and a degree of mutual dependence

Question 23

what was Stresemann’s plans for the German economy?

Answer 23

he believed he could manipulate global economic competition in order to undermine the Treaty of Versailles

Question 24

how would he carry these plans out?

Answer 24

he would encourage US investment in the German economy

Question 25

what was the Retenmark and its effect?

Answer 25

in october 1923, a temporary Retenmark was set up and various emergency money were banned. replacement restoed faith in German currency and allowed prices to settle but people who previously had savings in the old mark were unhappy due to the new low value

Question 26

what did the Retenmark get replaced with?

Answer 26

the Reichsmark (RM) in august 1924

Question 27

what were the key points of the Dawes Plan and when was it?

Answer 27

1924 - Ruhr would be fully returned to Germany and demilitarised - annual reparation payment reduced until 1929 and repayments would be allowed over a longer period of time - Germany got a loan of 800 million gold marks to aid the recovery of economy, largely by US business leaders

Question 28

what did the Dawes Plan assert?

Answer 28

that Germany's economic stability was more important than making reparation payments

Question 29

how much money did Germany receive in loans between 1924-28

Answer 29

M16,000 million

Question 30

how much did Germany pay to Britain and France between 1924?

Answer 30

only M7,000 million

Question 31

what was the impact of the loans on German industry between 1923-28?

Answer 31

they allowed Germany to invest in industrial development, modernising its industry and doubling industrial production

Question 32

how did wages change in Germany from 1923-28?

Answer 32

wages rose every year during this period

Question 33

by 1928, what was the status of Germany's GDP?

Answer 33

it had recovered to its 1913 levels

Question 34

what were some of the areas the German govt invest in during the late 1920s?

Answer 34

public works, urban housing, sports arenas, public swimming pools, and opera houses

Question 35

how did the German govt support the working class in the late 1920s?

Answer 35

welfare payments and wages for govt employees were increased, benefitting the working class

Question 36

what role did US investment play in Germany's economy?

Answer 36

it helped reduce reparations payments and supported Germany's economic growth, as the USA wanted to protect their own investments

Question 37

what was the Young Plan of 1929?

Answer 37

it extended the reparations payment period to 1988 and reduced the total reparations to £1,850 million

Question 38

why was the Young Plan considered an achievement for Stresemann?

Answer 38

it was seen as a vindication of Stresemann's strategy of aligning Germany's economic success with the US economy, though it was opposed by extreme nationalists

Question 39

what was the main criticism from nationalists about the YP?

Answer 39

they saw it as a betrayal because it accepted Germany's war guilt, the core justification for the TofV

Question 40

what was the issue with Germany's balance of trade from 1924 to 1928?

Answer 40

it had a negative balance of trade every year except for 1926, largely due to reparations and debt payments

Question 41

why was there a farming depression in Germany?

Answer 41

failure to modernise, with German farms unable to compete with cheaper production in the USA and Britain

Question 42

how did cereal production in Germany change from 1913 to the late 1920s?

Answer 42

it dropped significantly, below 20m tonnes, except for 1928 when it almost reached 23 million tonnes

Question 43

how did unemployment change in Germany before the 1929 crash?

Answer 43

it rose from 1.2 million in 1928 to 1.9 million in 1929

Question 44

what was the main problem with Germany's economic recovery in the late 1920s?

Answer 44

it was insecure because it was dependent on US money, making the economy vulnerable if US investment was withdrawn

Question 45

how did the Wall Street Crash affect Germany's economy?

Answer 45

Germany's prosperity was dependent on US loans, which stopped after the Depression, pulling Germany into economic downturn. US banks demanded quicker repayment of loans, worsening the situation

Question 46

how did unemployment change in Germany from 1929 to 1933?

Answer 46

it rose from 1.4 million to 6.1 million

Question 47

what impact did the Depression have on German industry?

Answer 47

industrial production fell by 40% from 1929-32. around 50,000 firms closed five major banks closed in 1931

Question 48

how did agriculture suffer during the depression?

Answer 48

food prices dropped by around 45% from 1929-32, as domestic demand and exports shank, further hurting farmers already struggling since the Golden Years

Question 49

how was the German welfare system affected by the Depression?

Answer 49

it was designed for a smaller number of unemployed, so it could not cope with millions of jobless, leading to increased poverty and inadequate support for the long-term unemployed

Question 50

how did the Depression affect German politics?

Answer 50

it undermined democracy, leading people to seek alternatives like Nazis. the communists also grew stronger, organising rent strikes and a paramilitary group, the Red Front

Question 51

how did the German govt respond to the Depression with spending cuts?

Answer 51

the govt cut civil servants' wages by 20%

Question 52

how did Germany's diplomacy change during the Depression under Bruning?

Answer 52

he used the economic crisis to secure the suspension of reparations in 1931 through the Hooer Moratorium

Question 53

what was Bruning's public works initiative during the Depression?

Answer 53

in 1931, he started a small public works program for road and canal construction it was expanded in 1932, and his successors fruther increased the budget, leading to some decline in unemployment