Reacting To Economic Challenges 1918-1932

Question 1

What can you judge the strength/weakness of an economy on?

Answer 1

Trade
Inflation
Growth: GDP
Employment
Redistribution of wealth: class, welfare system, living standards

Question 2

What was Germany;s economy like following WW1?

Answer 2

-high inflation
-poor living standards due to reparations
-lack of money and resources
-perceived as worthless

Question 3

What were Germany’s 4 economic problems?

Answer 3

Debt : Germany debt = 144,000 million marks, currency lost over 1/3 pre war value
Industrial potential : Germany’s industry potential was severely crippled by loss of Saarland and Upper Silesia
Investment : Germany had little hope of attracting foreign investment when capital was in short supply
Reparations : total liability of £6,600 million, annual payments equivalent to 1/4 of all German exports

Question 4

What were the positive elements of Germany’s economy after ww1?

Answer 4

-export trade increased
-unemployment fell sharply
-working class benefitted

Question 5

Weimar’s post ww1 war debt

Answer 5

-1914-1918 government borrowed almost 150 billion marks, government raised around M7/M8 billion in taxes which was enough to pay interest of debt but not enough to reduce it

Question 6

Weimar’s pose ww1 reparations

Answer 6

ToV forced Germany to pay reparations. Inter-Allied Reparations commission of 1921 set figure of £6,600 million. Germany could pay this back by sending goods such as coal

Question 7

Weimar’s post ww1 loss of income

Answer 7

ToV meant Germany lost territory. German coal productions declined by more than 15%. Lost almost half of deposits of iron-ore. Economy = less profitable

Question 8

Weimar post-ww1 unemployment

Answer 8

6 million soldiers left the army during 1919 = knock on effect for women who were sacke to allow returning soldiers jobs. February 1919 = 1.1 million without jobs.

Question 9

Economic effects of hyper-inflation

Answer 9

-industrialists enjoyed cheap credit
-landowners and middle class house holders paid off their mortgages in inflated currency
-homeowners + pensioners = incomes evaporated by scale of inflation

Question 10

Social effects of hyperinflation

Answer 10

-workers benefitted it middle class didn’t as inflation wiped out their savings
-health conditions plummeted, infant mortality rates increased, average lifespan declined, disease spread easily

Question 11

Political effects of hyperinflation

Answer 11

-industrialists blamed workers for high wages
-everyone blamed civil servants

Question 12

Who suffered from hyperinflation?

Answer 12

Middle class as their savings were wiped out. Working class benfitted

Question 13

What was hyperinflation caused by?

Answer 13

Government printing more money in order to pay striking workers

Question 14

What did hyperinflation cause?

Answer 14

Uprisings as groups wanted to take power from government, people could pay off loans, loss in savings

Question 15

Problems from hyperinflation

Answer 15

-passive resistance was costing the government too much
-government spending too much money
-currency had become worthless

Question 16

What were Stresemann’s solutions to the problems of hyperinflation?

Answer 16

-introduced policy of fulfilment
-initiated deep cuts in public spending
-introduce a new currency called the Rentenmark

Question 17

What were the effects of the solutions to hyperinflation?

Answer 17

-German miners would return to work and provide French with the coal they demanded = Germany would make reparation payments.
-didn’t have to pay workers as much money = less reason to print money so economy is not flooded
-new currency was extremely successful as regular forms of trading and payment able to restart

Question 18

What does ‘turmoil’ meaning?

Answer 18

Period of confusion or chaos

Question 19

How can you judge how strong an economy is.

Answer 19

Growth rate of GDP

Question 20

What features of Weimar economy could be considered turmoil/couldn’t?

Answer 20

-hyperinflation
-debt

Couldn’t = benefits to working class

Question 21

What was Dawes plan and who suggested it?

Answer 21

Stresemann, it was an economic alliance with the USA = hoped would lead to reductions in economic bill.

Question 22

What did Stresemann believe?

Answer 22

-germany would be 3rd power with a sophisticated economy
-Britain and France would be dominant powers due to economic strength
-USA would stand in the way of french demands for reparations
-Germany could not rely on military power to secure position in the world

Question 23

How did Dawes plan transform Germany’s reparation payments?

Answer 23

-Germany received a loan of 800 million gold marks provided mainly by US business leaders
-annual repayment amount was reduced by 1929
-repayments allowed over a longer period of time to reduce annual reparations bills

Question 24

How does Dawes plan work?

Answer 24

-USA gives loans to germany
-Germany pays reparations to Britain and France
-Britain and France repay war loans to the USA

Question 25

What was the impact of Dawes plan?

Answer 25

-solved Germany’s immediate reparation problems
-by late 1920s, German GDP had recovered to its 1913 level and tax revenues were increasing = government used this money to invest in public work schemes, sports arena, public swimming pools etc

Question 26

How can you measure living standards?

Answer 26

-employment statistics
-access to health care
-‘real’ wages

Question 27

Positives of living standards

Answer 27

-2.8million homes were built in 1919-1932
-increase in retailing and service jobs
-number of women in workforce expanded

Question 28

Negatives of living standards

Answer 28

-farmers suffered a severe fall in come from 1926 onwards
-depression years 1929-32 = high unemployment, falling wages, working class were hard hit
-effects of ww1 = malnutrition, infectious disease, war wounded

Question 29

Positive aspects of the Weimar economy

Answer 29

-workers pay increase by 37.5% between 1924-9
-1925, chemical industry producing 1/3 more than 1913

Question 30

Negative aspects of the Weimar economy

Answer 30

-1918 : 150 billion marks in debt
-1929 : 5.6 million unemployed
-decline in agricultural productivity and growth

Question 31

Economic and social consequences of the depression

Answer 31

-decline in industrial production and agricultural prices
-collapse of 5 major banks in 1931 meant 50,000 businesses went bankrupt
-widespread poverty and homelessness creating dependence on charities

Question 32

What was Bruning’s main priority?

Answer 32

End reparation payments and persuade Britain and France to drop their reparation demands

Question 33

What was the Hoover Moratorium of June 1931?

Answer 33

Suspended payments so the German government had more money to spend

Question 34

What was Bruning’s short term plan?

Answer 34

Allow crisis to deepen so he could ensure not just suspension but cancellation of reparations = greater budget cuts + passed a decree lowering wages to 1927 levels

Question 35

What were the success of Bruning?

Answer 35

Despite commitment to public spending, initiated a small public works scheme in 1931 focusing on road and canal construction.

Question 36

What was the success of Von Papen?

Answer 36

Expanded initiative further, increasing budget from RM 167 million to RM302 million in September 1932, emphasised indirect measures such as giving tax cuts to firms that employed new staff

Question 37

Success of Von Schliecher?

Answer 37

Continued existing initiatives but believed direct intervention was necessary. = established a Rm 500 million emergency fund to employ people, carry out repairs works, road and canal maintenance