The Golden Age Of The Weimar Republic, 1924-28 - Economic Developments

Question 1

Why did Passive resistance against the occupation of the Ruhr end?

Answer 1

Stresemann calculated that he had no choice as Germany’s economy was beginning to come to a halt and inflation was out of control. Therefore ending passive resistance meant the government stopped paying workers who refused to work for the French and reduced government expenditure

Question 2

What did ending passive resistance lead to?

Answer 2

The attempted beer hall putsch in Munich

Question 3

What was the new currency in Germany called?

Answer 3

Rentenmark

Question 4

How was the Rentenmark supported?

Answer 4

By a mortgage on all agricultural and industrial land until August 1924 when it became backed by the German gold reserve, maintained at 30% of the value of the reichmarks in circulation

Question 5

Who controlled the issuing of the Rentenmark?

Answer 5

Hjamlar Shcacht

Question 6

How did the Stresemann’s government balance the budget?

Answer 6

They cut expenditures and raised taxes, employees were cut, 300000 civil servants lost their jobs, taxes were raised

Question 7

What were the results of the changes to how the economy operated?

Answer 7

• those who had lost savings in the collapse of the old currency did not gain anything from the new currency
• weaker companies reliant on credit crumbled
• the number of companies that went bankrupt rose to over 6000 in 1924.

Question 8

Who was Charles Dawes and what did he do?

Answer 8

He was an American banker who acted as the chairman of the Allies Reparations committee and was in charge of getting Germany to pay their remaining reparations of £6.6mn from the war in a managable way

Question 9

What did Dawes Plan recommend?

Answer 9

• the amount paid each year by Germany should be reduced until 1929 - they should restart reparations by paying 1000 million marks and this should be raised annually by 2500 million/year
• Germany should receive a large loan of 800 million marks from the USA to get the plan started and to allow for lots of investment into German Infrastructure

Question 10

What were the reactions in Germany to the Dawes Plan?

Answer 10

• Stresemann saw the plan as an ‘economic armistice’ however agreed to secure foreign loans
• the DNVP and Nazi movement attacked this plan and thought Germany should refuse to pay any reparations

Question 11

What benefits did the Plan create?

Answer 11

After it was accepted by the allies and Germany in July 1924, it meant the allies accepted Germany’s problems with the repayments, the loans granted meant new machinery, factories, houses, jobs could be provided, the French left the Ruhr in 1924-25 after it was clear Germany would pay reparations

Question 12

What advances were made to the German economic recovery goals after the Dawes Plan?

Answer 12

There were advances in the chemical industry such as artificial fertilisers, the inflation rate was close to zero, loans helped to fund housing, schools, roads etc, affordable homes e.g. in 1925, 178,930 dwellings were built and in 1926 there were to be 205,793 more new homes, health improvements from welfare investments

Question 13

What were the limits to the economic recovery?

Answer 13

• By the end of 1925, unemployment reached 1mn and by march 1926 this had risen to over 3mn as more people needed to seek work due to population growth. Therefore, population growth also leg to an increase in housing shortages.
• Companies reduced workforces in order to save more - the mining companies reduced from 136,000 from 1922-25 by 56,000 in 1925-29
• the mittelstand gained very little as they were bankrupted by hyperinflation

Question 14

What issues did Farmers face as a result of hyperinflation?

Answer 14

• After 1923, the government made it easier for farmers to borrow money however this made matters worse - farmers became torn with debt at a time when prices were falling so they couldn’t keep up with the repayments
• there was a global grain surplus in 1926 and a price slump
• by the late 1920s, there was an increase in bankruptcies amongst farmers and most lost land

Question 15

What was compulsory arbitration and what did it cause?

Answer 15

When both sides in an industrial dispute agree to allow an independent figure known as the arbitrator decide on a solution - it was used to decrease the number of strikes in industry

Question 16

What was the problem with Compulsory arbitration?

Answer 16

In 1928, a dispute over wages in iron and steel in the Ruhr resulted in the arbitrator granting a small wage to increase to the workers. The employers refused to pay this and locked out the workers for 4 weeks

Question 17

Why was the ‘young plan’ introduced?

Answer 17

The French would not agree to withdraw allied forces from the Rhineland until a final settlement of the reparations issue was agreed

Question 18

What did the ‘young plan’ demand?

Answer 18

It obliged Germany to pay reparations until 1988 however they were only required to pay £1.8bn instead of £6.5bn, foreign control over reparations was ended and therefore Britain and France agreed to withdraw troops from the Rhineland by June 1930

Question 19

What was the problem with the young plan?

Answer 19

There was a nationalist campaign against it led by Alfred Hugenburg, the DNVP leader, including Hitler and the Nazis which said the ‘freedom law’ should go to a referendum. Despite being rejected in the referendum, 13.8% of the electorate voted for the law showing in-depth support for the right-wing

Question 20

What was the ‘freedom law’?

Answer 20

It required the government to repudiate the war-guilt clause of the Treaty of Versailles, to demand immediate evacuation of occupied areas and declared that any minister who signed a treaty that involved acceptance of war guilt should be trialed for treason