Weimar Germany - Economic policy 1928 onwards Flashcards
What evidence of the economy’s recovery was there by 1930
(trade)
- Germany was one of the world’s leading exports of manufactured goods.
- The reparations were being paid & exports were increasing
- The government increased welfare benefits
What evidence of the economy’s recovery was there by 1928 - production
Industrial production exceeded pre-WW1 levels
What evidence of the economy’s recovery was there by 1928 (plans)
The USA lent Germany 800 million marks through the Dawes Plan to invest in industry & commerce
What evidence was there of the economy’s continuing problems by 1928
instability
the economic boom was unstable - US loans could be called in at short notice which could ruin Germany
What evidence was there of the economy’s continuing problems by 1928
wealth inequality
- still huge extremes of poverty & wealth/power
- money was concentrated in just a few men who ran more than half of Germany’s industry
What evidence was there of the economy’s continuing problems by 1928
jobs
- unemployment was a serious problem
- the economy was growing but it wasn’t creating jobs fast enough for Germany’s rising population
What evidence was there of the economy’s continuing problems by 1928
agriculture
- Income from agriculture went down between 1925-29
- Farmers earnings were half the national average by 1929
The Dawes (1924) & Young (1929) plans renegotiated ……. & resulted in germany being loaned………. to aid her economic recovery
reparation payments
25.5 billion marks
When was the wall street crash
28 October 1929
Why were Germany incredibly vulnerable to the impacts of the Wall Street Crash
- The German economy was propped up by foreign capital, predominantly from American loans & foreign trade
- When America immediately stopped foreign lending & recalled loans from abroad, Germany’s economy suffered
What was the impact of the Wall Street Crash on German businesses - income
- Unemployment increased meaning less disposable income, so demand for goods dropped
- Suppliers & businesses couldn’t pay off their loans & went bankrupt
What was the impact of the Wall Street Crash on German businesses - unemployment
- German businesses reliant on bank loans did not have enough money to sustain their production & pay their workers
- Fewer goods were sold, so more people lost their jobs
What was the impact of the Wall Street Crash on banks
- With unemployment on the rise, many Germans could not afford rent & mortgage payments, & lost their homes
- With banks no longer receiving payments back from businesses & individuals, 5 major banks collapsed, so people lost their money & savings
Following the collapse of 5 major banks, the German economy…
spiralled into a economic depression
How many people were unemployed in Germany by 1932
6 million
How many businesses bankrupted following the wall street crash
50,000
Following the wall street crash, industrial production declined by ….%
40%
What was the effect of the Wall Street Crash on workers wages
On average wages feel between 20-30%
National Income shrunk by 39% between 1929-32
What were the positive features of Stresemann’s domestic policies between 1924-28?
Main 4 points
- Increased political stability
- Increased acceptance of democracy
- The creation of the Grand Coalition in 1928
- Hindenburg
What were the positive features of Stresemann’s domestic policies between 1924-28?’
Increased political stability
there were no putsch or political assassination attempts between 1924 and 1929.
What were the positive features of Stresemann’s domestic policies between 1924-28?’
Increased acceptance of democracy
- Between 1924 and 1929, the support for extremist and anti-constitution parties declined
- and public support for pro-constitution parties increased
what percentage of people voted for the extremist, anti-constitutionist NSDAP in 1928
2.6%
what percentage of people voted for pro-constitution parties in 1928
57.7%
What were the positive features of Stresemann’s domestic policies between 1924-28?’
The Creation of the Grand Coalition in 1928
this coalition was of the left, right and centre and commanded a secure majority (over 60%) of the Reichstag.
What were the positive features of Stresemann’s domestic policies between 1924-28?’
Hindenburg
- Despite his authoritarian past,
- President Hindenburg upheld the new constitution
- and in 1928, chose a SPD Chancellor, despite his hostility to socialism.
What were the negative features of Stresemann’s domestic policies between 1924-28?’
3 main reasons
Unstable coalition governments
Extremism
Growing contempt & cynicism towards democracy
What were the negative features of Stresemann’s domestic policies between 1924-28?’
Extremism
- Support for extremists had reduced
- but it remained worryingly high with a quarter of people voting for parties that wished to see Weimar democracy end
what percentage of people voted for anti-democratic parties in 1928
27.4%
What were the negative features of Stresemann’s domestic policies between 1924-28?
Growing contempt & cynicism towards democracy
The turn-out to elections declined in mid-1920s compared to high turn outs in 1919 and 1920.
What were the negative features of Stresemann’s domestic policies between 1924-28?’
Unstable coalition governments
- Forming stable coalition governments proved difficult.
- There were 7 governments between 1923-9.
- Some governments did not have a majority in the Reichstag.
What were the negative features of Stresemann’s domestic policies between 1924-28?’
Unstable parties within coalition governments
- Political parties, which were not used to the real political power that the new constitution gave them, did not work together well.
- The SPD were reluctant to co-operate with others
- Governments were brought down by trivial issues.
How successful was Stresemann at achieving political stability in Germany through his actions
- Party achieved success:
- Increased acceptance of democracy
- & coalition governments show an attempt at cooperation,
- however still extremism
- & less people voting
What were the positive features of Stresemann’s foreign policies between 1924-28?
- Enabled Stresemann to renegotiate reparations
- Better financial relations through Dawes Plan 1924
- improved French & German relations - French Evacuation of the Ruhr 1925 - Locarno Pact
- Germany was admitted to the League of Nations in 1925
- The Young Plan 1929
What were the positive features of Stresemann’s foreign policies between 1924-28?
Opposition
- Nationalist right-wingers were opposed to the acceptance of the Treaty of Versailles
- its diminishing impact helped to gain the govt support from Nationalists
What were the negative features of Stresemann’s foreign policies between 1924-28?
Dawes Plan
- The Dawes Plan was dangerously dependent on the continuation of American loans
- In attempting to break out of the hyperinflation crisis of 1923,
- Stresemann had linked Germany’s future to forces (and economies) beyond its control
How successful was Stresemann at achieving stability in Germany through his foreign policy
- Partly successful:
- reparation payments were lowered & foreign relations improved
- The Dawes Plan placed great dependence on the American economy, short term economic solution
What was Chancellor Bruning’s policy to combat the economic collapse
A policy of Deflation
What was the idea of Deflation behind Bruning’s policy
Reducing the prices of goods & services to reduce government spending
Why did Bruning think deflation was the best policy to combat the economic crisis
He thought if state revenue declined, state expenditure had to also be cut
Bruning used an……. ……. to implement…
emergency decree
wage cuts, rent cuts & tax rises
What was one of the few benefits of Bruning’s policies
- As Germany’s depression deepened, it was clear to other countries that it would not be able to meet reparations payments or repay loans.
- On July 1, 1931, the Hoover Moratium suspended the need for Germany to pay back loans for a year.
What would have been effective at combatting the economic crisis instead of Bruning’s policies
- plan for job creation, as had happened in the USA,
- or
- devaluing the Reichsmark to make German goods cheaper and to increase demand for these goods abroad
What was the impact of Bruning’s economic policy of deflation
- Deepened the recession between 1930 and 1932.
- Industrial production fell, prices fell and exports fell, all by around 50%.
- Unemployment rose to its highest level ever in 1932.
In May 1932, the chancellor, Bruning was replaced by…
Von Papen
How did Von Papen try to combat the economic crisis from 1932
- introduced some tax concessions and subsidies for businesses
- that created new jobs and helped to improve the economy
Why were Von Papen’s economic policy unable to be effective
- The goverment was caught up in political problems
- which made it increasingly difficult to focus on the economy
- and produce a coherent policy to bring about economic stability
What policy fell apart as parties disagreed over how to manage the economic crisis 1929-32? What was the result of this?
The Grand Coalition government - subsequent governments were minority administrations
What direction did the German political system move in during the years of the depression
An authoritarian direction
How many laws were passed under Article 48 from July 1930 to July 1932, in comparison to those passed by the
Reichstag?
44 compared to just 5
How many chancellors and elections were there during the years of the depression in an attempt to find a government which worked?
4
What evidence is there of increasing political violence during the years of the depression?
July 1932 election campaign - 461 riots in Prussia
During the years of the depression, the Lego of support for pro-constitution parties….
Declined
During the years of the depression, the Lego of support for pro-constitution parties declined by ____
23.5%
What is the relationship between the economic environment and the political situation between 1929 and 1932?
Declining economy- an increase in support for anti constitution parties
