Weimar economy

Question 1

what is the balck market

Answer 1

illegal trade during the war. The black market developed as inflation shot up and goods became scarse

Question 2

what is social welfare

Answer 2

government set up retrainig schemes and provided loans to those leaving the army. Set up pensions for widows , orphans and the wounded

Question 3

what are reperations

Answer 3

laid down in the ToV put the republic into even deeper debt. Gov borrowed and printed money to pay back. Talks were held about the amount and how it should be paid

Question 4

what is emergency decree

Answer 4

10th august 1923 benafitted gustav stressmann as the gov could delay reichstag meetings, this allowed the gov to act quickly as there was no debates.

Question 5

who was gustav stressmann

Answer 5

chancellor in 1923 and as foreign minister from 1925 to 1929.

Question 6

who was Hjamalar Schacht

Answer 6

co-founder of the german democratic party and served as president of the reichbank under the weimar and nazi

Question 7

what was the rentenmark

Answer 7

took over as germanys currency in november 1923 and it helped to restore faith in the germany cureency both home and abroad

Question 8

what is the reichmark

Answer 8

augist 1924 took over from the rentenmark as germanys offical currency

Question 9

what was the dawes plan

Answer 9

1924 ended the occupation of the rhur and created a staggered payment plan to pay german reperations

Question 10

what was the young plan

Answer 10

1929 cut german reparation payments from 6.6 billion to 2 billion and gave Germany 59 years to pay it back

Question 11

what are cartels

Answer 11

a group of businesses that made agreement to set prices. the surviving big businesses did this to stabilise the economy. the biggest being IG Farben

Question 12

what were the living standard like between 1918 - 1932

Answer 12

during the war the country found it hard to farm as the hourses were required for the front. the weimar republic did impliment social welfare schmes such as benafits and pensions which meant that living standards improved. however many lived in poverty in cramped houses and huge amounts of people faced unemployment so much so it was one of the nazis main policies when they first entered power

Question 13

wht happened to the gold resereves during the war

Answer 13

the government had spent all of the gold reserves in the war making germany a poor nation

Question 14

what was the situation with currency and inflation after the war

Answer 14

inflation had made the mark virtually worthless and people were starving. in june 1914 there were just over 200 million marks in circulaton by December 1918 this had riesn to 6,600 million. there were also 150 printing firms with 2000 printing presses working day and night t produce bank notes. people lost jobs

Question 15

what happened when the production of war good stopped

Answer 15

people in factories lost jobs, farms production dropped by 20% and industrial output had almost halved

Question 16

what happened to land after the war

Answer 16

direct result of the Tov which caused loss of land in both the agriculture sector and industrial sector which lowed the economy

Question 17

what happened to the black market mean after the war

Answer 17

during the war a black market had developed as inflation shot up and goods became scarce. After the turmoil of strikes and political unrest and changes to the gov and the economy spiralled out of control

Question 18

what were the economic crises faced by the weimar

Answer 18

• social welfare
• debt and reperations
• the Rhur
• hyper inflation

Question 19

what was the social welfare crisis

Answer 19

after the war the gov set up retraining schemes for those who had fought in the war and provided loans to help those leaving the army until they could find work. it also set up pensons for the wounded, widows and orphan. Both the federal Gov and lander provided layers of support, there was an estimated 1,537,000 disabled veterans. The Gov looked after them with a mixturenof lumps sum payments and pensions. by 1924 the Gov was supporting about 781,000 veterans, 420,000 widows and 190,000 parents of dead soldiers. 10% of the populatiobn recieved payments and many more were on regional poor relief. The Gov went into massive debt to pay them.

Question 20

what was the debt and reperations crisis

Answer 20

The Gov had borrowed heavily during the war by 1918 it owed about 150 billions marks, reperations laid down in the ToV put the Gov into even deeper debt. At first the Gov tried to pay back by printing and borrowing money. From 1921 the Gov was entngled in negotiations on how much it should pay and how. Germanys economy was in problems but so was the rest of the world so until 1924 reperatioins were paid in kind eg/wood, coal and oil.

Question 21

what was the rhur crisis

Answer 21

In January 1923 Germany failed to achieve its reperations payments in full. The London ultimatum of the allies had been that payments should be met or the rhur would be occupied, which was vital from the German economy because of its coal and industrial base there. In 1923 French troops did just that with the aid of belgium troops. The Gov instantly stopped all payments to france (not the other allies) and told all german workers not to exept rders from non-germans and urged passive resistance. The French repilled by cutting the rhur off from the rest of Germany by setting up, patrolles by armed froces and taking control of the telegram services. Neither France nor Germany benafiited from the situation. In 1923 the new coaltion gov called a stop to passive resistance tactics and began negotiations (the dawes plan) with the French.

Question 22

what was the hyperinflatin crisis

Answer 22

the crisis in the rhur escalted inflation into hyperinflation on the 1st of May 1922 a slice of bread cost 1 mark by 1st of September 1923 100,000 and by 1st December 700 billion. people lost complete faith in currency and began to rely on bartering and those with goods to sell on the black market made huge profits. Aswell as towns, regions and businesses began to issue their own Notsgeld ‘emergency money’. there was mass unemployment and even the gov cut back on staff

Question 23

what were the policies to recovery

Answer 23

• making money work
• recovery of business
• trade recovery
• agriculture
• Gov spending

Question 24

what was the making money work policy

Answer 24

Stressmann’s first policy was to regain control of money. In October 1925 the mark was withdrawn and as a temperary measure the rentenmark took its place. Savers objected as it was worth less than one gold mark. Various other forms of currecny was banned ‘notsgeld’. The transactions was monitored by Hjlamar Schlatt. The currency change restored faith in currency and the economy. The Gov also used emergency powers to control rent, wages and prices. Schlatt also oversaw the change to the reichmark in August 1924.

Question 25

was the recovery of business policy

Answer 25

Big businesses were more able toride out economic problems. In the 1920’s however many small businesses collapsed and in 1924 there were more bankrupcies than in the past years together. The surviving businesses began to form cartels who fixed prices and helped stabilise the economy, some cartels were organised in interests the biggest was IG farben. Many factories were rebuilt with the latest mass production assmebly lines and ‘time motions’ that were taking hold of the USA. There was significant levels of dispute between workers and owners all through the period, with workers pressing for better working conditions and owners trying to cut wages and extened working hours. Strikes and lockoutss were common. The Gov set up the state of abrition to deal with this.

Question 26

what was the trade recovery policy

Answer 26

It was difficult for Germany to establish trade links, especially with Britain and France because of bad feelings after the war. There was shifting in world trade due to the US policy of isolationism, that lead countries to introduce tarriffs on imported goods which impacted Germany heavily. With Germanys admission to the league of nations and other international agreements that Stressmann set up. German exports were back to the levels of 1913 of 10 billion marks, by 1926 and 1929 exports were up 34% than 1913

Question 27

what was the agriculture policy

Answer 27

farming was a significant employer in the 1920s 1/5 to 1/4 of all workers were agricultural workers. Bigger farms managed better than smaller ones as they could invest in new machinary and farming techniques. Many smaller firms were heavily in debt and couldnt afford to pay interest on their loans or sometimes even their tax. Big land owners had large influence to block farming reforms eg/ when Hindenburg stopped the 1918 reich settlement law that made land owners sell their land to the Governement to be redistrubuted to the poor. The influence of the wealthy also pressed for higher grain subsidies that benafitted larger firms.

Question 28

what was the government spending policy

Answer 28

the new economy was built on foreign loans many of them short term with the expectations that they would be rewarded as the world economy grew. Even with the economy recovery most ordinsry people were not as well off as they had been before the war, so they payed less tax and resented the idea of tax raises. In 1913 the lowest tax band was made up of 47% of tax payers and this moved to 35% in 1926 and 62% in 1928. This meant the government had to borrow more money which it would of otherwise raised in tax. This was another way the economy was flawed. The Gov had its own bank to provide regional funding this helped businesses along as the gov could keep lending. A final problem was that industrial expansion and production was damaged by constant disputes between businesses and workers which affected productivity and drove wages up until 1930 when the depression led to such high unemployment people would work for any wage.

Question 29

how did the Great depression affect Germany

Answer 29

In 1929 the US economy collapsed and us bank not only stopped renewing short term foreign lending but also called back loans from abroad. All the countries it was lending to were hit hard

busineeses sell fewer goods –> unemployment rises –> businesses sell fewer goods –> unemployment rises –> more unemployment –> so on and so forth