1.3 German economy under the Weimar Constitution Flashcards
(16 cards)
Who was Gustav Stresemann?
Chancellor in 1923, led the government during the hyperinflation crisis
What did Stresemann implement?
A new currency (rentenmark)
A new national bank
Who did Stresemann appoint as Special Currency Commissioner?
Hjalmar Schacht, an expert economist
How did Stresemann get France to withdraw from the Ruhr?
Promised Germany would continue to pay reparations
How did Stresemann help pay reparations?
Secured help from the Allies, dropping installments for more flexibility
Who drew up the Dawes Plan and when?
Charles Dawes in 1924
What were the terms of the Dawes Plan?
Germany would pay what it could in the next 5 years
USA provide a loan of 800 million gold marks
Reparations total reduced and Germany given more time to pay
What was the weakness of the Dawes Plan?
German economy became heavily dependent on loans
Who drew up the Young Plan and when?
Owen Young, 1929
What were the terms of the Young Plan?
Reparations total reduced to 25% of the 1921 total
Repayment period extended to 58 years
What was the Unemployment Insurance Act 1927?
Made employers responsible for half of unemployment welfare
How did the German economy improve 1923-1929?
Heavy industry revived to pre-war production levels
Germany produced 33% more than 1914 in 1929
Loans were used to build houses/factories
Unemployment decreased, industrial wages rose
What was the unemployment rate?
Over 1 million
How did agriculture fail in the 1920s?
Yields remained low; production was 75% of pre-war levels and income per head was 44% below national average
How did industry fail in the 1920s?
Industrial growth remained low
Wages drew level with middle classes and over half of middle class employees seeking unemployment benefits didn’t qualify
Wage increases did not match production increases
How did the government fail in the 1920s?
Continued to have budget deficits due to increasing welfare costs
Public spending out of control
