GERMANY, CHAP 2; the recovery of Germany, 1924-29

Who becomes Chancellor in 1923? What does he lead?

Gustav Stresseman leads the Great Coalition.

What did the Great Coalition do?

• solved hyperinflation

• caused a decline in unemployment

• more houses built

• investment in transport

Overall improvement to the quality of life & economy.

How is hyperinflation solved?

• The Rentenmark is introduced in 1923 as a temporary solution - this currency is based on Germany’s agricultural & industrial worth, so German people are more confident in it.

• By 1924, the Reichsmark becomes the permanent currency and the Reichsbank is the main bank.

• The economy & faith in Germany’s financial system grows.

When & what was the Dawes Plan?

1924. The USA sends Charles Dawes to advise Stresseman on Germany’s economy & improve relations.

• the USA loans Germany 800 million marks

• economic & diplomatic conditions of the reparations payments improved - temporarily lowered & the Allies will be more considerate towards Germany

• France agrees to withdraw troops from the Ruhr

• Allies recieve some control of the Reichsbank & railways

However, some Germans still resent it - still paying feels like Germany’s just accepting the blame

What was the extent of Germany’s economic recovery?

Significant; the stability brought more investment from other countries, and the money was mostly used for boosting industry.

• Industrial output doubles from 1923-29

• Wages rose, cost of living fell - quality of life improves.

• More investment in public buildings

• New labour laws to help with unemployment , including benefits

When & what was the Locarno Pact?

1925. A collection of treaties involving Germany, France & Britain + Belgium, Czechoslovakia, Italy & Poland

• Germany accepts Western borders & the Eastern borders are to be settled peacefully through the League of Nations.

• Germany agrees Alsace-Lorraine is French, France agrees to not occupy the Ruhr.

VICTORY; international relations improve - peace is more likely, and Germany is now being treated like an equal

What was the period from 1925-29 called?

The Locarno Honeymoon.

When does Germany join the League of Nations & what does it cause?

1926. Germany joins as a positive step for Stresseman’s diplomatic policies & wish to improve relations.

• Confidence in the Weimar regime grows - Germany’s accepted back into international matters. However, some people saw this progress as a symbol of the Treaty of Versailles.

When & what was the Kellog-Briand pact?

1928. 62 countries, including Germany, the USA and France sign the pact. It aimed to prevent a future war by making countries promise to not use military force to settle disputes.

VICTORY; shows another clear improvement in Germany’s international relations. However, some people still resented as they saw it as doing nothing to end the Treaty of Versailles.

When & what was the Young Plan and how did it end?

1929. A plan created to help Germany with the reparations payments as they were still struggling.

• Total bill reduced - payments to be made over the next 59 years and only a 1/3rd had to be paid, the rest only if possible.

• France agreed to leave the Rhineland by 1930 (15 years early)

Initially a victory - the German gov. could now reduce taxes & fund the industry & job market. However, there were still people that resented it because Germany would continue paying, now over a long timescale that would hinder it’s progress.

In the end, it was inconsequential - after the 1929 Wall Street Crash, the Americans couldn’t afford loaning money to the Weimar republic.

Key dates 1924-1929?

1924. Reichsbank & Reichsbank introduced + The Dawes Plan

1925. Locarno Pact signed

1926. Germany joins League of Nations

1928. Kellog-Briand Pact signed

1929. Young Plan finalised. Wall Street Crash & The Great Depression