Weimar Germany, 1918-33: Economy Flashcards
How had World War I affected the German economy?
- National debt of 144 million marks in 1919
- Treaty of Versailles made Germany pay £6.6 billion in reparations, allies refused to suspend them
What was the French Occupation of the Ruhr?
- Germany made it clear at the end of 1922 that they were unable to pay reparations and had failed to meet coal and steel demands
- 60,000 French and Belgian soldiers occupied the Ruhr in January 1923 and took over production
How did the government respond to the occupation of the Ruhr?
- Government encouraged passive resistance, no work was done and workers did not co-operate with French
- Suspension of reparation payments from the Germans
- Successful in that the amount of coal and steel going to France and Belgium was significantly lower
How did the policy of passive resistance lead to the Hyperinflation crisis?
- Government continued to pay revenue and wages, but no income was made from the Ruhr
- More banknotes were produced, over 600 billion marks in circulation by August 1923 and one loaf of bread cost 200 billion marks in November 1923
- Confidence in currency collapsed, loans worthless
What was the main thing that Stresemann did to end the Hyperinflation crisis and how successful was this?
- Introduced the Rentenmark, exchange rate of 1RM for 1000 billion marks
- Old notes burned and currency quickly accepted
- Those who had savings never got these back
What were the Dawes & Young Plans?
- 1924, Dawes Plan suggested French leave the Ruhr and set a new timescale for reparations, helped lead to foreign influx and investment from the USA
- 1929, Young Plan said Germany would pay 2,000 million marks a year until 1988
- Some still angry that Germany had to pay reparations
How did Germany strengthen international relations in the 1920s?
- 1925, Locarno Pacts between countries like Italy, France and Britain that promised not to invade one another
- 1926, Germany joined the League of Nations, German exports 34% higher in 1929 than 1913
- Had valuable steel and coal other countries needed
What evidence is there that the German economy did not recover in the 1920s?
- Unemployment remained high, 3 million unemployed in 1928, rose to 6 million in the early 1930s
- Legislation that allowed an 8 hour day was altered to 10 hours, however employers resisted demands to increase wages for this period
How did the Great Depression begin?
- October 1929, Wall Street Crash, USA recalled loans and there was a decline in world trade
- German firms went bankrupt, unemployment rose, poverty rose and people had less to spend on things, demand for German goods dropped
How did Bruning attempt to recover the economy and how successful was this?
- Proposed cuts in government spending and higher taxes, emergency decree in July 1931
- Passed using Article 48, made it clear Germany would not be able to pay reparations and avoided inflation
- Caused industrial production to fall
How did Von Papen attempt to recover the economy and how successful was this?
- Some tax concessions and subsidies for businesses, created new jobs
- Some economic improvement, however government was caught up in political problems, making it hard to produce coherent economic policies
How did Von Schleicher attempt to recover the economy and how successful was this?
- Appointed Reich Commissioner for Employment, meant to draw up public work schemes funded by the government to create jobs
- Had a budget of 500 million Rentenmarks, however could not actually introduce anything before the Nazis came into power
How did housing improve during the Weimar period?
- 1924-31, 2 million new homes built
- Homelessness reduced by 60%
- Houses were cramped, shared with multiple families, no heating or washing facilities
What was employment and wages like during the Weimar period?
- Construction of new homes led to increase in jobs in raw materials and construction businesses
- High unemployment in middle class professions like teachers and lawyers
- 1928, 184,000 middle class unemployed
- More working class people earning a wage, greater to spend
What were welfare and pensions like during the Weimar period?
- 1927, unemployment insurance for those out of work
- 2 million pensions by 1924 for widows and orphans
- Worthless in 1923 during Hyperinflation
- Cuts in welfare in 1930 with Brunings policies
