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Germany > Economic Developments (1924-28) > Flashcards

Economic Developments (1924-28) Flashcards

1
Q

When was the peak of the hyperinflation crisis?

A

August 1923

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2
Q

How did German government change amidst the hyperinflation crisis?

A

August 1923: Cuno’s government collapsed and was replaced by Stresemann’s ‘great coalition’

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3
Q

What was the “great coalition”?

A

First coalition to include parties from the left and right (DVP, Centre, Socialists and DDP)

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4
Q

Summarise Stresemmann and his beliefs?

A

. His party was the DVP
. was chancellor for only 103 days
. Left office in November
. His priority was to keep inflation under control?

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5
Q

How did Stresemman plan on controlling inflation?

A

. Ending Passive resistance (September)
. Issuing a new currency (November)
. Balancing the budget

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6
Q

What was the importance of ending passive resistance?

A

Meant the government stopped paying workers who refused to work for the French so strikes occurred less often

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7
Q

How did Stresemann view ending passive resistance?

A

. The only option as inflation was out of control
. Essential first step in reducing government spending

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8
Q

How did the German population react to ending of passive resistance?

A

. Unpopular and risky move, led to Beer Hall Putsch

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9
Q

What currency replaced the useless Reichsmark?

A

Rentenmark, initially temporarily
One rentenmark = 1 trillion Reichsmark

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10
Q

How was the introduction of the Rentenmark supported?

A

. German gold reserves couldn’t fully back the currency so a mortgage was placed on all industrial and agricultural land
. Government kept a close control on the amount of money in circulation

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11
Q

When was the Reichsmark fully cashed in and what did this mean?

A

. August 1924:
- Reichsmark fully became the Rentenmark
- Rentenmark fully backed by gold reserves
- had to be maintained at 30% of the value of the Reichsmark’s still in circulation

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12
Q

How did Stresemann balance the budget of solving hyperinflation?

A

. Raised taxes for individuals and companies
. Government expenditure cut
. Salaries of government workers cut - 300,000 civil servants lost jobs

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13
Q

How did Stresemann’s methods of balancing the budget help some and destroy others?

A

. Companies careful not to get into excessive debt prospered
. Companies reliant on credit crumbled

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14
Q

Who didn’t benefit from Stresemman’s economic changes at all?

A

Those who lost savings before the Rentenmark came in

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15
Q

What are the stats of the number of companies that went bankrupt in Germany from 1923-24?

A

. 1923 - 233
. 1924: more than 6000

Stresemman’s economic changes had massive consequences on the people

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16
Q

Who was in charge of creating the Rentenmark?

A

Hjalmar Schacht

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17
Q

How much Reichsmark was in circulation in November 1923 in Germany?

A

400 billion trillion

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18
Q

Who are the mittlestand and how were they affected by the hyperinflation crisis?

A

Comfortable people who saved carefully = badly hit by hyperinflation crisis

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19
Q

How long did Stresemman stay as foreign minister till?

A

1929

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20
Q

What were Stresemann’s aims and what did he believe would happen if the aims were met?

A

. Restore Germany’s economy
. Restore Germany’s position in foreign affairs

Believed success in this would erupt support for the Weimar Republic

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21
Q

What did Stresemann use to achieve his aims?

A

Article 48

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22
Q

When had the French fully withdrawn from the Ruhr?

A

1925

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23
Q

When was the Rentenmark introduced?

A

15th October 1923

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24
Q

What did Stresemann convince German allies to do?

A

Consider the harsh state of reparations payments, leading to Dawes Plan

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25
Q

What committee did Stresemann set up and when?

A

Nov 1923 - asked Allies’ Reparations Committee to set up a committee of financial experts to address the reparations issue
- USA wanted Germany to be able to pay as much of the payment to France through loan which would be repaid back to USA
- Charles Dawes (American banker) was chairman of the committee

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26
Q

How is it difficult to state Stresemman’s role in the Dawes Plan?

A

Out of government by the time it was finalised but remained as foreign secretary, taking credit for achievements

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27
Q

What did Dawes plan confirm?

A

The original reparations payment of £6.6 billion

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28
Q

What did the Dawes Plan try to do?

A

Make reparation payments more manageable

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29
Q

What did the Dawes Plan propose?

A

. The amount paid by Germany should be reduced until 1929
. Germany should re-start reparations by paying 1000 million marks and this sum should be raised by annual increments over 5 years by 2500 million marks a year. Any further sum would be related to German industrial performance
. Germany should receive 800 million marks in a loan from USA to start plan and help invest in German infrastructure

30
Q

Did Stresemann agree to the Dawes Plan?

A

Reluctantly, as he needed a way to secure foreign loans such as from USA in this

31
Q

How did Stresemann and the Reichstag feel about the Dawes Plan?

A

. Heated debate in the Reichstag over it
. Stresemann saw is as an ‘economic armistice’: only a temporary fix

32
Q

What were the benefits of the Dawes Plan?

A

. Allies accepted that Germany’s problems with reparations payments were real
. Loans were granted, with which new machinery, factories, houses and jobs could be provided so Germany could rebuild economy
. Cooperation with other countries could allow Germany into League of Nations

33
Q

When was the Dawes Plan agreed and accepted by Germany and its allies?

A

July 1924

34
Q

What were the reactions to the Dawes Plan?

A

. ‘National opposition’ in Germany (mainly DNVP): attacked the compromise to reparations as they believed the TOV was unjust and reparations shouldn’t be paid at all

35
Q

Why did the French gradually leave the Ruhr?

A

Saw that Germany was willing to pay reparations under Stresemann

36
Q

Germany’s industry underwent extensive ‘rationalisation’. What is this?

A

New production techniques introduced and old equipment replaced with new machinery

37
Q

How did ‘rationalisation’ of Germany come about?

A

Germany had to hand over many materials as part of reparations payments

38
Q

How did cartels come about in Germany and give stats?

A

The USA were financially helping through Dawes Plan, so big German industrialists began to make cooperative agreements with smaller firms
- by 1925, 3000 cartel agreements in operation
- 90% of German coal and steel production occurred through cartel agreements

39
Q

How did inefficient enterprises get back up after 1925?

A

TOV allowed tariffs on imported foreign goods to protect Germany’s industry
Many firms received states subsidies to survive

40
Q

Why did German worker strikes decrease?

A

Compulsory arbitration was used to settle industrial disputes

41
Q

What is compulsory arbitration?

A

Industrial disputes settled by arbitration, where both sides of a dispute agree to follow an independent figure (arbitrator) to decide on a solution (equality)

42
Q

How was compulsory arbitration enforced?

A

Made compulsory by law in Weimar Germany

43
Q

How did employers react to the use of compulsory arbitration?

A

. Felt it was biased towards trade unions
. Didn’t like the state interfering with their affairs

44
Q

What had the Weimar Republic already set up for workers?

A

. Max of 8 hours of work a day
. Trade unions had right to be part of work councils in factories or mines

45
Q

What was the 1928 compulsory arbitration dispute?

A

. Dispute over wages in iron and steel industry in the Ruhr
. Arbitrator granted small wage increase to workers
. Employers refused to pay the increase and were locked out of their jobs for 4 weeks
. Workers were backed by the government and paid by the state during this dispute

46
Q

How were there clearly improvements in living standards among German workers in this period?

A

Especially those backed by powerful trade unions:
. 1927: real wages increased by 9%
. 1928: real wages rose by another 12%

47
Q

What did Stresemann say in his speech before his death in 1929?

A

. ‘Germany is dancing on a volcano’
. ‘If the short-term loans are called in, a large section of our economy would collapse’

48
Q

Why did unemployment continue to be a problem despite Stresemann’s attempts?

A

. More people were seeking work
. Public spending cut
. Companies reduced workforces to make sufficient efficiency savings

49
Q

How did mining companies in Germany reduce their workforces in this period?

A

1922-25: reduced by 136,000
1925-29: reduced by another 56,000

50
Q

How bad was unemployment in this period?

A

. End of 1925: 1 million
. 10% Germans unemployed in 1926
. Fell after this gradually but back up to 8.5% in 1929

51
Q

Who didn’t gain from Stresemann’s economic recovery?

A

. Mittlestand (professional middle-class):
- white-collar workers didn’t enjoy the wage rises of the industrial sector
- middle-class managers and clerks didn’t benefitted as they were bankrupted by the 1923 crisis

52
Q

By late 1920s, how different were the middle class and industrial sector wages?

A

Equal

53
Q

How can you oppose the claim that Stresemann’s era was a ‘golden age’ compared to other countries?

A

Industrial production in 1925: 95 tonnes
Industrial production in 1913: 100 tonnes

Barely any difference. Similar to WW1 production

54
Q

What were the successes of Stresemann’s changes to Germany’s industry?

A

. Living standards especially increased for those backed by powerful trade unions
. Coal, steel and industrial production increased
. Number of strikes decreased from 1973 in 1924 to 739 in 1928
. Advances in chemistry: industry production of artificial fertilisers
. Inflation rate practically zero
. Car and plane industry developed
. Wages increased from 1924 =better living
. Loans helped finance industrial development
. 1925, 178,930 dwelling homes built to increase political stability
. Money spent on welfare payments and health improvements (new schemes of relief launched in 1924)

55
Q

What were the failures in Germany’s changes to industry?

A

. Investment in new machinery and factories falling by 1929
. Economy shrank from 1928-29
. Cars still too expensive for the average German despite developments
. Massive population growth = small housing shortage
. Overcrowding of cities = political instability

56
Q

When did the German government try and make it is easier for farmers to borrow money and what was the consequence?

A

1923, farmers became riddled with debt at a time when prices were falling and so they couldn’t keep up their payments from the borrowed money to pay back

57
Q

How did the German government try and relieve the farmers’ plight?

A

By introducing high import tariffs on food products, import controls and subsidies to farmers, these measures didn’t go far enough

58
Q

How did German farmers’ plight get worse?

A

Due to global grain supplies and price slump in 1925-26

59
Q

When was the ‘farmers revenge’ and what was it?

A

1928: small-scale riots against foreclosures and low market prices

60
Q

How were farmers impacted 1923-28?

A

. Worldwide agricultural depression kept food prices low
. Few farmers were able to make a profit on their land
. Smaller peasant farmers who tended to hoard money and their savings were wiped out by inflation
. By late 1920s, there was an increase in bankruptcies among farmers and many lost land as banks demanded repayment of loans
. By 1929, German agriculture was at less than 3/4 of pre-WW1 levels

61
Q

How did Germany use foreclosures during this period?

A

When farmers borrowed money from banks during hyperinflation crisis to improve farms, they used their farms as security for the loans. Once farmers couldn’t repay these loans, the banks ‘foreclosed’ on the contract of the loan e.g took over the farms and evicted the farmers

62
Q

Why did the Young Plan occur?

A

Dawes plan was only supposed to be a temporary fix. Even though French and Belgium left Ruhr by 1925, allied forces remained in occupation of the Rhineland and French refused to withdraw forces until a final settlement of the reparations issue was reached

Stresseman agreed that the issue should be considered by an international committee led by the American businessman Owen Young

63
Q

What was Stresseman’s position at the time of the Young Plan?

A

Foreign minister after his coalition government collapsed

64
Q

What were the terms of the Young plan?

A

. Obliged Germany to continue paying reparations till 1988
. Total reparations bill was reduced, with Germany now having to pay £1.8 billion
. Annual payment Germany had to pay was increased
. All foreign control over reparations was ended and the responsibility for paying the reparations was placed solely under control of German government
. In return to these agreements, Britain and France would withdraw all their troops from the Rhineland by June 1930

65
Q

When did the Young plan committee meet?

A

In Paris in 1929 with Schacht as one of Germany’s representatives

66
Q

How did the Young Plan influence public opinion in Germany?

A

Despite containing a number of concessions, it still influenced and increased nationalist opinion

67
Q

What did Alfred Hugenberg (new DNVP leader) do after the Young plan?

A

Launched a nationwide campaign against the plan, with other conservative groups such as Hitler and the Nazis

68
Q

What was the plan for Hugenberg’s campaign against the Young plan?

A

Drew up a draft of a law ( the ‘freedom law’ ) which they demanded should be submitted to a national referendum.

69
Q

What did the proposed ‘freedom law’ consist of?

A

. Required the German government to repudiate the war guilt clause
. To demand immediate evacuation of occupied areas
. Deemed that any minister who signed a treaty that accepted a war guilt clause could be tried for treason

70
Q

How did the ‘freedom law’ make its way to the Reichstag?

A

Hugenberg’s group launched a petition in support of their law and attracted 4.135 million signatures, enough to make it into a national referendum in the Reichstag

71
Q

What happened with the freedom law in the Reichstag and what does it show?

A

It was defeated and also rejected in the referendum. However, the fact that 13.8% of the electorate voted for the ‘freedom law’ revealed the growing support for right wing nationalism

Germany (12 decks)

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