Weimar Economy Flashcards
June 1919
Weimar government accept the conditions of the Treaty of Versailles
April 1921
Allies fix reparation payments at £6.6 billion
January 1923
French and Belgian troops invade the Ruhr after Germany failed to pay reparations
November 1923
Introduction of Rentenmark to help end hyperinflation crisis after value of mark falls rapidly
April 1924
Dawes Plan agreed to lower German reparation burden on the economy
German Agriculture problems
Suffer severe crisis due to worldwide slump in food prices
October-December 1928
Ruhr lockout of workers by employers after breakdown of industrial relations
June 1929
Young Plan agreed with Allies to further lower reparation burden on the economy
October 1929
Wall Street Crash wipes out millions of dollars from American stock markets
March 1930
Growing economic crisis causes the collapse of the German government. Bruning becomes chancellor
How many major banks collapsed in 1932?
Five major banks in Germany collapse setting off a severe financial crisis. Severe cuts imposed by Bruning
February 1932
Unemployment in Germany reaches 6 million
July 1932
Germany ends reparation payments
German Debt Problem
International debt of 144,000 million marks
German industrial potential problems
Crippled by the loss of the Saarland and Upper Silesia
German investment problem
Attracting foreign investment wasn’t possible due to the trade deficit and weak currency
German reparation problems
Had to give 132 billion marks and 1/4 of all German exports
Positive elements of German economy in the early 1920’s
Unemployment fell, this meant there were more jobs for working class as the mark devalued, so they exported more
German War debt
Borrowed 150 billion marks from 1914-1918. Government raised 7 billion but this only paid the interest.
Inflation increased 200%
How did Germany try and pay the reparations?
Goods such as coal
Printed money
How did Germany lose income due to territory?
Lost territory like the Saar and Lorraine which were high industrial areas and so the loss of coal production went up 15% The economy was less profitable and tax revenues dropped causing high debt
Post-War unemployment
6 million soldiers left the army during 1919
Unemployment was at 1.1 million which was 7% of workforce.
Women were sacked and the value of wages was less than half in 1919 compared to 1913
December 1922
France and Belgium sent 60,000 troops to the Ruhr to seize the coal produced as replacement for the missing payments
What was passive resistance?
German workers in the Ruhr refused to produce coal, however the French just stayed and so Germany had to print more paper money
What was the problem with printed money?
Flooded Germany without a rise in the amount of goods causing inflation and destabilisation
Economic effects from hyperinflation
- Mark was devalued to £200 billion marks for a dollar
- Hugo Stinnes paid off his loans and bought out all his rivals as debts were easy to be paid
- Savings became worthless (pensions)
Social effects of hyperinflation
- Crime increased (mainly robbery)
- Hatred for Jews increased
- Life expectancy dropped and infant mortality raised
Political effects from hyperinflation
Support for extremist parties increased
Myths from hyperinflation
Not everyone suffered as loans could be paid off
It wasn’t caused by reparations, Germany had an internal debt of 144,000 million mark, also losing industrial land (Saar) and they couldn’t attract foreign investments
The mark devalued so they exported more and so there was more jobs for the working class (unemployment fell)
What did the government do to try and solve hyperinflation?
Introduced the policy of fulfilment as passive resistance was too expensive, French forces left the Ruhr in 1925
Initiated deep cuts on public spending and so reduced pay of civil servants and slashed benefits
Introduced the Rentenmark, it remained stable and then the Reichmark was introduced with the same value as gold
What did the Dawes plan do for Germany?
- Germany received a loan of 800 million gold marks provided mainly by the US
- USA gave Germany the right to take a payment holiday on paying back reparations
- Annual repayment amount was reduced by 1929 and over a longer period of time
What were the consequences of the Dawes Plan?
Became a circle as Germany paid the French and British with US loans who then gave the money back to the US for their help in the war
By late 1920’s German GDP recovers to 1913 level and tax revenues increased causing public work schemes like urban housing and sport arenas
How did the Dawes Plan lead to the 1929 Young Plan?
As the German economy grew it attracted foreign investment, especially the US. They were keen to protect their investment so increasingly committed to reducing German reparation payments
What were the negative consequences of the Dawes Plan?
Germany just became reliant on the US Many Germans (mostly right wing) didn’t want to fulfil the ToV
In what years did industrial production double as the industry was modernised?
1923-1928
Positive and negative aspects of wages and employment in Weimar Germany
Positive: wages increased by 30%, unemployment fell and women got more jobs
Negative: Farmers suffered, unemployment peaked at 2 million in 1926
Positive and negative aspects of Housing in the Weimar
Positive: 2.8 million homes were built between 1919-1932, government spent 20x more by 1932
Negative: 1 million homes were needed in 1923
Positive and negative aspects of health and welfare in the Weimar
Positive: welfare spending was 60% higher in 1929 than 1913, life expectancy improved until 1929
Negative: effects of WW1 like disease, orphans and wounded were serious in the early years
What happened to production in the Ruhr during the Golden Years?
It increased by 18%
What happened to rural debt in the Golden Years?
It increased by 20-30%
Social and economic Consequences of the Great Depression from 1929-1932
- Huge decline in industrial production and agricultural prices
- Exports fell by 55%
- Unemployment rose from 1.8m to 5.6m
- Half of all people aged 16-30 were unemployed
- State benefits reduced with 15% receiving nothing
Political consequences of the Great Depression
1928 Nazis receive 3% vote to 18% in 1930
Burning called the 1932 elections believing he’d have the most support but was disliked due to wanting abolish the welfare state and destroy trade unions
