gustav stresemann and economic recovery · web view2020. 4. 21. · this dramatic turnabout...

Paper 3 – Weimar and Nazi Germany – Section 1 – The Weimar Republic 1918-1929

Week 5: How well did the Weimar Republic recover 1924 - 1929? Was it all good news?

Gustav Stresemann and economic recovery

In 1923, the Weimar Republic was on the verge of collapse socially and economically. But surprisingly, this crisis was followed by a period of relative stability and success. The period 1924-1929 was a time when the Weimar economy recovered and cultural life in Germany flourished.This dramatic turnabout happened in large part because of the role played by Gustav Stresemann who became Chancellor in August 1923 during the hyperinflation crisis. This was a time when prices in Germany went up quicker than people could spend their money and the German currency lost its value. Stresemann was Chancellor for only three months but continued to serve as Foreign Minister, rebuilding and restoring Germany’s international status until his death in October 1929, ironically just weeks before the Wall Street Crash that would end Weimar’s period of greater prosperity and stability.The end of hyperinflation

Gustav StresemannStresemann’s single greatest achievement as Chancellor was to end hyperinflation. He did this in just three months by:

Calling off the ‘passive resistance’ of German workers in the Ruhr. This helped Germany’s economy because goods were back in production and the Government could stop printing money to pay striking workers.

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Promising to begin reparations payments again. This persuaded France and Belgium to end the occupation of the Ruhr by 1925.

Introducing a new currency called the Rentenmark. This stabilised prices as only a limited number were printed meaning money rose in value. This helped to restore confidence in the German economy both internally and internationally.

Reducing the amount of money the government spent (700,000 government employees lost their jobs) so that its budget deficit reduced.

Renegotiating reparations

The payment of reparations, which had caused the hyperinflation crisis in the first place, had to resume, but Stresemann’s decisive actions in the autumn of 1923 gained Germany the sympathy of the Allies. They agreed to renegotiate payments and this led to two new repayment plans in the next 5 years:

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The Dawes Plan The Young Plan

Date Proposed April 1924, agreed September 1924

Proposed August 1929, agreed January 1930

Amount of reparations to be paid

Stayed the same overall (50 billion Marks) but Germany only had to pay 1 billion Marks per year for the first 5 years and 2.5 billion per year after that

Reduced the total amount by 20 per cent. Germany was to pay 2 billion Marks per year, two thirds of which could be postponed each year if necessary

Amount of time over

which they

Indefinite 59 years, with payments to end in 1988

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The Dawes Plan The Young Plan

would be paid

Loans made available to

GermanyGermany was loaned 800 million Marks from the USA

US banks would continue to loan Germany money, coordinated by J P Morgan, one of the world’s leading bankers

Did the Weimar Republic economy really recover?

The years 1924 to 1929 have been referred to as Weimar’s ‘Golden Years’, but historians disagree as to just how much the German economy recovered from the effects of World War One and hyperinflation.

Signs of recovery Signs of continued weakness

By 1928 industrial production levels were higher than those of 1913 (before World War One)

But… agricultural production did not recover to its pre-war levels

Between 1925 and 1929 exports (sending goods or services abroad) rose by 40 per cent

But… it spent more on imports than it earned from exports, so Germany was losing money every year

Hourly wages rose every year from 1924 to 1929 and by 10 per cent in 1928 alone

But… unemployment did not fall below 1.3 million and in 1929 increased to 1.9 million

IG Farben, a German chemical manufacturing company, became the largest industrial company in Europe

But… German industry became dependent upon loans from the USA

Generous pension, health and unemployment insurance schemes were introduced from 1927

But…The government ended up spending more than it received in taxes and so continued to run deficits from 1925 onwards

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International relations

After losing World War One, being forced to take the blame for the conflict and the subsequent issues surrounding payment of reparations, Germany was an international outcast. Yet, Germans were still incredibly bitter about their treatment in the Treaty of Versailles, where they also lost territory on all sides. However, as Foreign Minister, Stresemann oversaw a dramatic improvement in Germany’s relationship with the rest of Europe between 1925 and 1928. This is best illustrated by three events:

Locarno Treaties 1925. In October 1925 Germany, France and Belgium agreed to respect their post-Versailles borders, whilst Germany agreed with Poland and Czechoslovakia to settle any border disputes peacefully. Germany had previously complained bitterly about their loss of territory.

League of Nations 1926. When the League of Nations was set up as part of the Versailles agreement Germany was initially excluded. By signing the Locarno Treaties Germany showed that it was accepting the Versailles settlement and so a year later was accepted as a permanent member of the Council of League, making it one of the most powerful countries in the League.

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Kellogg-Briand Pact 1928. Germany was one of 62 countries that signed up to this agreement, which committed its signatories to settling disputes between them peacefully.

These developments meant that Germany was accepted into the emerging ‘international community’ that sought to work together during the 1920s to avoid another destructive war. It also helped Germany’s internal wounds to heal – the government was seen to be taking decisive action to make life better for people and right some of the wrongs that the Treaty of Versailles had caused. This led to greater political stability and less extremism. This ethos of collaboration and peaceful cooperation only lasted, however, until the onset of the Great Depression following the Wall Street Crash of October 1929.

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Task 1: Complete the table with the meaning of the word and then use it in a sentence

Key term Meaning Use it in a sentence

Hyperinflation

Gustav Stresemann

Dawes Plan 1924

Rentenmark

Reichsmark

Reichstag

Young Plan 1929

Locarno Pact or Agreement 1925

League of Nations

Kellogg Briand Pact 1926

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Why were American loans so important in Germany’s recovery after 1923?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

3. What happened to the old German money or currency and what replaced it?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

4. What had happened to Germany’s reparation payments by 1929?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

5. Why did other political parties, like Hitlers Nazi party, do so badly 1924 - 1929?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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6. Was it all good news for Germany’s economy 1924 - 1929?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

7. How did Stresemann help with Germany’s relationships with other countries 1924 - 1929?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

8. Study the following two interpretations about how well Germany recovered in the years 1924 - 1929?

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From 1924 - 1929 the Weimar Republic was much stronger than it had been just after the War. Led by Stresemann the different Parties worked together and the extreme parties like the Nazis gained few seats in the Reichstag. The German people were better off and more contented.

Interpretation 2

German prosperity was built on quicksand foundations. The Weimar Government was dependent on high interest American loans. What if the Americans demanded their loans back? Also unemployment never fell below 1.3 million.

a. What is the main difference between the two views in Interpretations one and two? Use evidence from both to support your answer.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

b. Why do you think that these interpretations are so different? (Tip use the sources here – you will notice 1 matches 1 and the other 2. 11 | P a g e


One reason the interpretations have different views on Germans recovery is because they use different sources. For example Interpretation 1 has used sources like ……….. which says …………………………………………………………………………………………………………………………………………….However, Interpretation 2 has used sources like ……………. Which says ………………………………………………………………………………………………………………………………………………..

c. Using evidence from both interpretations and your own knowledge of events which interpretation do you think is the more accurate in explaining Germany’s recovery 1924 - 1929?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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gustav stresemann and economic recovery · web view2020. 4. 21. · this dramatic turnabout...

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