Strengths and Weaknesses of the Economy 1924-29

Question 1

who was Hjalmar Schacht?

Answer 1

an internationally respected finance expert who was appointed by Stresemann as Special Currency commissioner

Question 2

What was the rentenmark?

Answer 2

A new currency, accompanied by a new national bank, providing greater stability and introduced by Stresemann

Question 3

How to Stresemann get the French to withdraw troops from the Ruhr?

Answer 3

By promising Germany’s former wartime enemies that it would resume paying reparations.
Secured help from former Allies in reparations

Question 4

When was the Dawes Plan?

Answer 4

April 1924

Question 5

Who set up the Dawes Plan?

Answer 5

American expert banker Charles Dawe

Question 6

What changes to reparations did the Dawes Plan make? (3)

Answer 6

• Germany given more time to pay
• Reduced to 132 000 million marks
• More flexibility than instalments, G could pay what could over next 5 years

Question 7

How much loans from the USA did the Dawes Plan secure?

Answer 7

800 million gold marks (over 4/5 reps)

Question 8

When was the Young Plan?

Answer 8

1929, just before WSC and depression

Question 9

Who set up the Young Plan?

Answer 9

Owen Young

Question 10

What changes to Reparations did the Young Plan make?

Answer 10

• period for repayment extended to 1988
• negotiated rep instalments after 5yr mark from 2500mil marks to 2000 marks
• reps reduced to 1/4 original figure

Question 11

What did the Young Plan persuade France to do?

Answer 11

Move their troops occupying the Rhineland out 5 years in advance, in return for acceptance of the Young Plan

Question 12

Between 1924-31, how many homes were built?

Answer 12

2 million

Question 13

German industry achieved economies of scale because of

Answer 13

the growing number of cartels

Question 14

Businesses benefitted from lack of —– and more —— over workers

Answer 14

strike activity and more control

Question 15

1924-29, exports rose by

Answer 15

40%

Question 16

What did Vereinigte Stahlweeke do?

Answer 16

United aims of coal, steel and iron production to control 1/2 of Germany’s production

Question 17

What company in Germany became 2nd largest manufacturing power in Europe?

Answer 17

IG Farben, chemicals giant

Question 18

Industrial production was 33% more than in 1914 by what year

Answer 18

1938

Question 19

What did generous welfare schemes entail?

Answer 19

Good pensions and sick benefits scheme

Question 20

How low was unemployment by 1939

Answer 20

1.3 million

Question 21

Wages rose by as much as 5 and 10% in what years?

Answer 21

1927 and 1928

Question 22

How large was the compulsory unemployment insurance of 1937 for workers?

Answer 22

Covered 17mil workers, largest of kind in the world

Employers partly responsible and pay half

Question 23

What in Germany attracted foreign investors?

Answer 23

Higher interest rates on short term loans in Germany than on long term loans in own countries

Question 24

In 1938, industrial wages rose by how much?

Answer 24

12%

Question 25

What act was passed for farmers?

Answer 25

Farmers insurance act

Question 26

What helped increase investment in industry?

Answer 26

American loans

Question 27

Heavy industry was revived to...

Answer 27

almost pre-war levels

Question 28

what were state subsidies invested in?

Answer 28

public amenities

Question 29

What did Bookbinder say about Germany's manufacturing power?

Answer 29

'2nd largest Manufacturing power behind the United States'

Question 30

Name two of the reasons that the balance of trade in Germany was always in the red?

Answer 30

- German exports hindered by protective tariffs in many parts of the world - Germany handicapped by loss of resources in territories such as Alsace-Lorraine

Question 31

Focus on what badly affected the economy

Answer 31

rearmament

Question 32

What two benefits for workers put pressure on economic expansion

Answer 32

intro of the 8hr working day and welfare benefits

Question 33

What did Stresemann mean by 'Germany is dancing on a volcano'

Answer 33

Underlying fundamental weaknesses were disguised by artificial prosperity

Question 34

What two things were short-term tricks that put the govt into more debt?

Answer 34

Mefo Bills and deficit financing

Question 35

Stresemann tightly controlled the...

Answer 35

expenditure and circulation of money

Question 36

why couldn't the govt fund welfare schemes in constitution

Answer 36

not have enough funds

Question 37

-ve consequences of Germany's dependency on USA loans

Answer 37

Humiliating and put G into more debt | Also made G more vulnerable to conditions of World Econ 'when Europe sneezes, Germany catches a cold'

Question 38

How much did Germany get in US loans between 1924-30

Answer 38

25 billion dollars

Question 39

Post-1923, ---- improved but ------ erratic

Answer 39

economy improved but growth erratic

Question 40

Post-1923, ---- improved but ------ erratic

Answer 40

economy improved but growth erratic

Question 41

Rates of investment and saving were

Answer 41

discouraged

Question 42

Why wouldn't farmers buy new machinery

Answer 42

too in debt

Question 43

What was the income per capita of farmer's

Answer 43

44% the national average

Question 44

How much of Germany did Farmers make up

Answer 44

1/3 so small income had big impact on spending power

Question 45

What did Stresemann refuse imports of when world food prices increased

Answer 45

wheat and grain

Question 46

Yield for farmers remained slow. In 1920s, agricultural production was only ----- pre-war levels

Answer 46

75%, leading many farmers into voting Nazi- 'Farmer's revenge'

Question 47

How much was Germany's trade deficit?

Answer 47

Germany imported more than exported, by 1928 by 2.9 billion marks

Question 48

When was the farmers downturn

Answer 48

1926

Question 49

Cartels kept prices high, whereas competition would have...

Answer 49

lowered them, better for domestic production

Question 50

By 1929, what happened to mid class wages? What did this lead to?

Answer 50

They drew level with industrial wages and over 1/2 mid class employees seeking unemployment benefits not qualify

Question 51

big businesses were v reliant on...

Answer 51

govt funds

Question 52

Overall rate of what was slow

Answer 52

industrial growth

Question 53

unemployment levels didn't go past

Answer 53

1.3 million

Question 54

what was the period 1924-29 in Germany described as?

Answer 54

The Golden Age

Question 55

How was Stresemann key to recovery (4)

Answer 55

- won favour w Allies - helped with the Dawes and Young Plans - ended hyperinflation via the Rentenmark - appt of Schancht

Question 56

What positives were there to the Golden age? (5)

Answer 56

- increased industrial production - improved wages - reduced unemployment levels - regulated working hrs - new welfare system

Question 57

How was the 'Golden Age' a short-term fix?

Answer 57

If short-term credits recalled, parts of Econ would collapse

Question 58

How did not everyone benefit from the Golden Age? (2)

Answer 58

- Agriculture suffered amidst low food prices, as did Mittelstand - increased tension between employees and employers(resentment of employers)

Question 59

When was there a recession in some areas

Answer 59

1927, economy sick beyond repair?

Question 60

How was the state living beyond its means?

Answer 60

Constant budget deficits and increased welfare costs

Question 61

1929 production was at ------levels but still slow growth

Answer 61

1913

Question 62

What happened to the support of extremists during 1924-28?

Answer 62

Declined. Political calm. Mid-class liberal parties small but still govt instability.

Question 63

Overall, judgement on extent of economic recovery 1924-29

Answer 63

Some prosperity and confidence from a superficially improved economy BUT others were resentful about lost savings and insecure. Recovery fragile as bought on borrowed time and money.