Economic Developments - Extent of Economic Recovery

Industry

• American loans helped stimulate Germany’s industrial growth

• Industrial output grew after 1924 - however didn’t reach 1913 levels until 1929

• However the economy shrank in 1928 and 1929, resulted in investment in factories falling by 1929

• Industrial strikes were at its lowest in 1926

Living standards

• Rose as wages increased from 1924

• 1925, 180,000 dwellings were made to tackle the severe housing shortage in Germany (due to massive population growth), and 205,000 houses in 1926

• Money was spent on welfare payments and health improvements - new relief schemes launched in 1924

Wages and striking

• Strikes in German industry declined in 1924-28 due to the new system of compulsory arbitration

• Both sides in an industrial dispute have an independent figure decide on a solution

• However employers felt this was biased - as it was in favour of the trade unions and they resented state interference in affairs

• A 1928 dispute in wages in the iron + steel industry in the Ruhr resulted in a small wage increase for these workers

• Eventually spread to increases in all workers wages each year

• 1927 - wages rose by 9%, rose by another 12% in 1928L

Limits to economic recovery

• Before his death in 1929, Stresemann stated in a speech that the ‘economic position is only flourishing on the surface

• Unemployment continued to be a problem in these years

• Reached over 3 million unemployed by March 1926 - due to spending cuts, companies reducing workforce to make efficiency savings

• Mining companies reduced their workforce by 136,000 between 1922 and 1925

• White-collar workers didn’t enjoy industrial wage rises

• By late 1920s industrial sector wages were level with those of middle class - sometimes exceeded them

Agriculture

• Farmers gained very little from the economic recovery

• Farmers borrowed from banks, and had to use their farms as security for the loans, when they were unable to repay the loans due to prices (and profit) falling, banks ‘foreclosed’ on the contract - and took over the farms and evicted farmers

• Known as foreclosure

• 1928 - farmers initiated a series of small-scale riots - known as the ‘farmers revenge’ - in protest against foreclosures and low market prices

• By 1929 agricultural production was at less thn 3 quarters of pre war levels