1.5 Flashcards
Stabilising Currency: When did Gustav come into power? How long did it last? What were the main problems at this time?
-Stresemann was elected on August 12th, 1923 as a part of the ‘Great Coalition’. This was made up of DVP, DDP, SPD Z.
-He was in power for 103 days.
-There were 2 main problems: occupation of the Ruhr, hyperinflation.
Stabilising Currency: What did Stresemann do about the Ruhr? Why was this necessary?
-Called off passive resistance on the 26th September 1923 unconditionally & resumed paying reparations.
-This fuelled right-wing nationalists, the Munich Putsch, for example, happened during his time in office.
-Stresemann felt that it was absolutely necessary as the economy was grinding to a halt & inflation was out of control.
Stabilising Currency: What did Stresemann do to stabilise the currency?
-He issued a new currency, called the Rentenmark, under the supervision of Hjalmar Schacht. (Nov 1923)
-1 Rentenmark was worth 1 trillion marks.
-2,400 million Rentenmarks were issued, half to the gov, and half to the Reichsbank. By August 1924, all the old Reichsmarks had been cashed in & fully replaced.
-Civil service salaries were cut in half in half, 300,000 jobs cut in government, & increased taxation.
Dawes Plan: Who was Charles Dawes? Why was he significant? Was Stresemann relevant?
-Dawes was an American banker, who chaired the Reparations Committee. He created the Dawes Plan, which helped Germany pay back reparations.
-The US had a vested interest in this, as France used their reparations payments in order to repay war debts to the US.
-By April 1924, Stresemann’s government had collapsed, and he was now serving as Foreign Sec, so was still involved in the plan.
Dawes Plan: What was the Dawes Plan?
-It was an agreement made between USA & Germany that attempted to lessen the damage of reparations.
-US loaned 800 million in order to stabilise their economy.
-Annual reparation payments were decreased to make them more affordable. (They would start by paying 1000 million marks a year, this would increase by 2500 million each year for a further 5 years. After this it would increase relative to industry).
Dawes Plan: What were some problems with the Dawes Plan?
-The 800 million was simply another loan. They were essentially burdened by further debts.
-Reducing annual sums didn’t decrease the total amount of reparations. It was realistically no more affordable.
Dawes Plan: Was it well received? When was it finalised?
-Stresemann himself didn’t believe in it, saying it was ‘no more than an economic armistice’.
-It was also heavily criticised by opposition in the Reichstag, particularly the DNVP.
-It was finally passed approved by both the Allies & Germany in July 1924.
Dawes Plan: What were some benefits?
-The allies had finally recognised that Germany’s problems were apparent and did inhibit their ability to pay reparations.
-The loans granted allowed them to build factories, houses, and machines as well as create jobs that allowed them to rebuild the economy.
Young Plan: What was it? Why was it needed?
-The Dawes Plan had been a temporary solution, and (despite leaving the Ruhr) allied occupation persisted in the Rhineland.
-An international committee, headed by Owen Young, was established to fix the issue.
-They met in Paris in 1929, and determined that Germany would have to continue payments until 1988. The bill was considerably reduced (going from £6.5 billion to £1.8 billion), but annual payments were increased.
-In return, all foreign occupation had to end. (Britain and France agreed to withdraw all their troops from the Rhineland by 1930)
Young Plan: What was the reaction?
-Despite the concessions it made to Germany, nationalists who refused the idea of reparations as a whole (like the DNVP) were outraged.
-Alfred Hugenberg, the new DNVP leader launched a campaign against the plan, involving many other nationalist groups.
Young Plan: What did Hugenberg do?
-His campaign drafted the ‘freedom law’ that demanded a national referendum.
-This required the government to reject the war-guilt clause, to demand immediate evacuation of all occupied areas, and declare that any minister who signed a treaty that involved acceptance of guilt would be tried for treason.
-They launched a petition that gained 4,135,000 signatures, ensuring that it would be debated in the Reichstag.
Young Plan: Was the Freedom Law successful? What was its impact?
-It was heavily rejected in both the Reichstag debate & the referendum.
-However, 5,825,000 people voted for it, 13.8% of the electorate, implying that there was significant support for right-wing radicalism.
-Hitler’s leading role in the campaign, financed by Hugenberg led to his breakthrough in the political landscape.
Reform: Was the Dawes Plan positive or negative?
-Loans were mixed, as they allowed economy to stabilise but also just worsened national debt.
-Reduction of reparations payments made them more realistically achievable to prevent conflict like that of the Ruhr.
Reform: Was the League of Nations positive or negative?
-Originally, they had been unable to join the LoN (created as a result of the ToV).
-By 1926, they had been permitted to join. This implied that foreign relations were improving & Germany’s place in the world was better.
Reform: Was the Ruhr/Rhineland positive or negative?
-Stresemann ended the policy of passive resistance that had been devastating the economy, which is largely positive.
-However, this resulted in a lot of public backlash, most notably the Munich Putsch.
-Allied occupation in the Rhineland continued.
