Unit 2-The recovery of Germany 1924-29 Flashcards
What was the crisis that Germany was left in by 1923
-hyperinflation
-unemployment
-poverty
Who was Gustav Stresemann
He became chancellor in 1923
Led the ‘Great coalition’ government
was chancellor for 4 months, then became foreign secretary.
What was the temporary currency put in place to resolve hyperinflation
The Rentenmark
What was tightly controlled when the Rentenmark was introduced
The amount of money
What was the Reichsbank
The new independent German national bank; set up to help build confidence in Germany’s financial system
The Reichsbank was the new _________ national bank and was handed _______ over the new ______
independent
control
currency
What was the Reichsmark
The new permanent currency that replaced the Rentenmark
People in Germany and other countries could now rely on this
What did the implementation of a national bank and a new currency do
It resolved hyperinflation and restored faith in germany’s financial system. It was vital in allowing Germany’s economy to grow stronger
What was Stresemann’s belief
That Germany could only recover through diplomacy and that Germany should accept the Treaty of Versailles to improving foreign relations
However he also believed that it would be possible to negotiate better terms for Germany’s economy to recover
What did France and Britain owe to whom
millions of dollars to the US as the US provided war loans
what did France and Britain being in debt mean
It meant that if the TOV’s terms were negotiated and Germany’s economy could recover, it would be easier for France and Britain to get their money back through more realistic reparation payments
What else could benefit the Allies if Germany was given the time and lent the resources for economic recovery
Germany could become a strong trading partner again
Who did the USA send to Germany
Charles Dawes to resolve Germany’s economic problems
When was the Dawes Plan implemented
1924
What did Charles Dawes suggest the establishment of
The reichsbank
What were the key points of the Dawe’s plan
-The USA loaned Germany 800 million gold marks; this gace a massive boost to the German industry
-Reparations payments were reduced to 1000 million marks for the first 5 years to make them more affordable
-After this time, the payments would be increased to 2500 million marks
-The allies agreed to review the payment rate over time, to take account of Germany’s economic situation and ability to pay
-The French agreed to withdraw troops from the Ruhr. They also agreed that any missed payments in the future would be dealt with by the Allies together
-The allies were given some control of the Reichsbank and the railways in Germnany
Why did some Germans criticise the government for agreeing to the Dawes plan?
Because they felt that Germany was accepting the blame for starting the war by agreeing to continue with reparations payments
How much in loans did Germany receive from the next 6 years after the Dawes plan?
Over 25 billion marks
What did the Dawes Plan do overall
It helped boost Germany’s industry and and economy and allowed a substantial economic recovery.
What did the stability in German currency mean
more investment in Germany from foriegn countries, especially the US
Most of this investment was in boosting industry and building factories.
What happened to Germany’s industrial output between 1925-29
It doubled
What did the economic improvements lead to by 1927
the introduction of new laws which allowed people to claim unemployment benefit and ‘labour exchanges were set up to help people still unemployed find work.
