The recovery of the Republic, 1924-29 Flashcards
What happened in August 1923 to the chancellor position in Germany?
President Ebert appointed Gustav Stresemann as his new chancellor and foreign secretary. Gustav resigned as chancellor in November 1923 but remained the foreign secretary
What was Stresemann’s aim when coming to power?
He wanted to make the political situation in Germany Stable. He hoped that by stabilising the economy and gaining respect for Germany’s foreign affairs, Germans would feel more content with the Weimar Republic. Consequently, he thought this would reduce the support for extreme political parties like the NSDAP and Communist Party
How did Stresemann end hyperinflation?
In November 1923, Stresemann set up a state owned bank called the Retenbank. The bank issued the new currency called the Retenmark which had a strictly limited supply. Their value was tied to the price of gold and they were backed by German industrial plants and agricultural land. It had real value and was trusted
What was Stresemann’s follow up move with the Retenbank?
In August 1924, a newly independent national bank called the Reichsbank was given control of the new currency. The currency was renamed Reichsmark and was backed by Germany’s gold reserves.
consequences of the Reichsmark
- German money was now trusted abroad as well as at home.
- This brought an end to hyperinflation
- was a much stronger basis for the recovery of German business and improvements to employment.
- but it could not bring back the losses of those people ruined by it.
What was the Dawes plan?
After WWI the allies asked American banker Charles G. Dawes to resolve Germany’s non-payment of reparations. Under this plan:
- Reparations were temporarily reduced to £50 million a year
- US banks agreed to give loans to German industry. They loaned $25 billion between 1924 and 1930
How did the Dawes plan fix in the Ruhr?
Due to the Dawes plan, Allies were reassured they would get their reparations payment and the workers were no longer resisting so the French agreed to leave the Ruhr.
How did the Weimar Republic’s economy improve as a result of the Dawes plan?
why was this good?
- Industrial output doubled between 1923 and 1928, passing pre-First World War levels
- Employment, trade and income from taxation increased
This was a huge improvement for Germany as it eased the pressure from the reparations and helped boost the economy which strengthened the Weimar republic politically which meant that the German people were more content.
What were the drawbacks of the Dawes plan?
- The extreme political parties were furious that Germany had again agreed to pay Reparations
- Furthermore, the fragile economy recovery depended on American Loans
When was the Dawes plan agreed
1924
when was the Young Plan agreed?
1929
What was the Young plan?
The Young plan was set up by the allies and was headed by an American banker called Owen Young. The plan:
- reduced the total reparations debt from £6.6 billion to £2 billion
- Germany were given a further 59 years to pay.
What were the drawbacks with the Young Plan?
- The annual payment was still £50 million a year
- The payments stretched out until 1988
- The extreme political parties were incensed. Hitler described the extension of payments was “passing on the penalty to the unborn”.
Why was the Young plan a sensible measure in the end?
- Lower reparations payments allowed the government to lower taxes on ordinary German people
- Lowering taxes increased public spending power which resulted in a boost in German industry and an increase in jobs. The increase in jobs boosted spending power and a virtuous cycle of economic growth was formed
- The French agreed to leave the Rhineland in 1930
- The Weimar Republic had more support as a result
Did the public want the Young plan?
Yes, they did. A referendum, held in 1929, resulted in 35 million Germans in favour of the Young plan, about 85% of those who voted
