Economic Development and Policies Flashcards
Why was the German economy in trouble in 1918?
The goverment had spent all of its gold reserves in the war and had been printing more and more money which caused severe inflation and people being less willing to spend their money as it was worth less, which was bad for trade which had been disrupted all over Europe
What made trade in Europe even worse in 1918 then it had been during the war?
When the war ended the production of war goods such as ammunition had ended with it
How much had farm production dropped by during the war?
20%
How much had industrial output dropped during the war?
It had almosted halved
What parts of the treaty of versialles slowed the economy?
The reperations and the loss of both agricultural and industrial land
What had developed during the war because of inflation and the scarcity of goods?
A black market
How did the goverment attempt to support soldiers leaving the army?
It provided retraining schemes and provided loans for those leaving the army until they could find work
Who did the weimar goverment set up pensions for?
The wounded, widows and orphans
What institutions provided layers of support for people?
The federal goverment and lander
In 1920 how many estimated disabled veterans were there?
1,537,000
How many survivor veterans not categoried as disabled were there in 1920?
1,945,000
By 1924 how many veterans, war widows, children and parents of dead soldiers were the Weimar goverment supporting?
768,000 disabled veterans, 420,000 war widows, 1,020,000 children and 190,000 parents of dead soliders
What percent of the weimar population were reviewing federal welfare payments?
About 10 percent, many more were on poor relief
How did the goverment pay for all the welfare costs?
They went into debt
How much had goverment debt increased from 1914 to 1918?
3 times, owing about 150 billion marks not including reparations
From 1921 on how was Germany dealing with reperarion payments?
It was in negotiations with the allies on how to pay it, but the allies, especially France felt that Germany was deliberately trying to avoid having to pay any payments at all arguing that all Europe had economic problems
How were reparations paid up till 1924?
Through things like coal wood and railway carriages.
What happened in January 1923?
Germany failed to pay its reparation payments in full
What had happened when Germans had fell behind on reperation payments before?
The London Ultimatium of allies in 1921 had said that payments should be made in full or the allies would occupy the Ruhr
Why was the Ruhr essential to the German economy?
It’s coal and industries were based there
How did the allies respond to the German failure to pay reparations?
The French with the aid of Belgian troops invaded the Ruhr
How did the German goverment respond to the invasion of the Ruhr?
They instantly stopped all reparation payments to France but not the other allies, told all German officials not to accept orders from non Germans and urged workers in the Ruhr to have passive resistance such as strikes and sabotage.
How did the French respond to the German orders?%
They cut of the Ruhr from the rest of Germany by setting up a border, patrolled by armed forces and taking control of the postal and telegraph services. They brought in their own workers to solve the problem of passive resistance
What did the new German coalition goverment do in 1923?
They called for a stop to passive resistance tactics and began negotiations with the French as the occupation had been beneficial to neither sides.
How did the French treat the Germans during the occupation?
Very badly, things such as murder occurring and they provided very little in the ways of food and shelter
What had the crisis in the Ruhr lead too?
Inflation turning into hyper inflation
How did the cost of a newspaper go up throughout 1923?
One that cost 1 Mark in May 1922, cost 100,000 marks by 1 September 1923 and 700 billion marks by 17 November 1923
How did people deal with hyper inflation?
Through the black market and a bartering system
What happened when more people began using the black market?
It could not supply enough for everyone so the prices rose so much that only the rich could afford to buy on it and the black market made huge profits
What was a way that towns, businesses and regions delt with hypernflation?
They began to issue their own emergency money
How much staff did the goverment cut back on during hyper inflation?
About 750,000 federal and regional government employees lost their job
Why did even the wealthy suffer during hyperinflation?
They lost their savings and investments
What happened in August 1923?
The hyperinflation was at its worse so the goverment collapsed and a new coalition goverment with Streseman of the DVP as chancellor was formed
What was one of the reasons Stresemann was able to successfully deal with the crisis?
He was given emergency powers which sped up descion making in the reichstag without the problems of the coalition goverments in the past
How long did the new coalition goverment last for?
Only until November 1923 but Stresemann stayed on as foreign minister in the next goverment
What temporary measure did Stresemann take to deal with inflation in October 1923?
The almost worthless mark was withdrawn and the rentenmark took its place and the various forms of emergency money was banned
Why did people with savings object to the retenmark?
It had such low value against one gold mark.
How was the rentenmark changed?
In August 1924 it got changed to the reichsmark
What was the dawes plan?
An agreement made by the allies that reduced the amount of reparations to be paid and extended the time in which to pay it. The plans also included US loans to help Germanys economic recovery
What year was the Dawes Plan?
1924
What replaced the Dawes plan in 1930?
Young plan
What is the lacarno Treaty?
Germany agreed to accept the borders set by the treaty of versailles and the demilitarisastion of the rhienland. The allies also agree to open up talks about Germany joining the league of nations
What happened on the 10th of September 1926?
Germany joined the league of nation’s and were given a seat on the council with other major powers
What was the young plan?
Germanys debts were reduced from £6.6 billion too £2 billion and they are given am extra 59 years to pay it off
What does lower reparations mean for the economy?
It means lower taxes for German people so they have more spending power and this boosts the economy and employment
What percentage of voters voted for the young plan in 1929?
85%
When did the French leave the Rhur?
1930
What is Stresemann awarded in 1926?
The Nobel peace prize
What was the kellogg briand pact?
Germany and 61 other countries signed it which was a promise not to use war to achieve foreign policy aims
When was the Kellogg Briand pact passed?
August 1928
What did the kellogg briand pact do?
It showed that Germany was now included in the main powers, not dictated by them. This improved support for the Weimar goverment and moderate parties
How many seats did extremist parties hold in May 1924?
40%
How many seats did extremist parties hold in May 1928?
Only 28%
Why did Hindenburgs appointment as president reassure the middle classes?
Because he was a strong leader and this increased support for the Weimar goverment.
How had big businesses helped stabilise the economy in the early 20s?
As many small business had collapsed, the surviving big business began to form cartels whose fixed prices helped stabilise the economy.
What are cartels?
A group of businesses in the same industry or retail sector that makes agreements to set and control prices. In the mid 1920s there were 2500 competing cartels.
How was factory production changing in the 20s?
Many factories were being rebuilt with the latest mass production assembly lines which increased profits
How is the chemical industry an example of factories improving throughout the 20s?
By 1925 the chemical industry was producing one third more then in 1913 and almost two thirds more in 1930
What were some problems that factories were facing in the 20s?
There was significant dispute between workers and business owners. Workers pressed for better conditions and owners tried to cut wages and extend working hours. Strikes and lockouts were common although they were fewer in the more prosperous years of 1926-27
What did the goverment set up to try improve relations between workers and business owners in October 1923?
State abitration
What is State abitration?
They were boards which fixed working hours at eight hours a day as previously done in an Eberts agreement. But it now settled wages and any other matters of disputes, at first they tended to support the owners but eventually by 1924 started to make compromise rulings.
Why had there been a shift of trade world wide?
The USs isolationism
What had the shift in trade led too?
Many countries increasing tarrifs on foreign goods and Germany suffered from heavier ones due to countries initial reaction from the war.
Why did other countries need to trade with Germany?
Germany was producing steel and chemicals which they needed.
What was the result of Germany entering the league of nations and other international agreements Stresemann had set up?
German exports were back at their 1913 levels of 10 billion marks by 1926 and by 1929 exports were 34% higher than in 1913
How much of German workers were agricultural ones in the 20s?
Between a third and a quarter of all workers.
Why were bigger farmers doing better then smaller ones in the 1920s?
Small ones could not invest in new farming equipment or techniques. Many were heavily in debt and could not even afford to pay the interest owed on their loans. and sometimes their taxes.
Who is an example of a big land owner in Germany at the time?
President Hindenburg
How did big land owners effect the success of small farms?
They had political influence which enabled them to block farming reforms which did not work in their interest. They could also press for high grain subsidies which benefited those with the biggest farms the most.
How was the goverment spending heavily aswell as borrowing alot?
It subsidised grain production, industry and spent heavily on social welfare
