Stresemann's economic recovery

How much had industrial production recovered by 1927?

By 1979 industrial production had returned to pre- First World War levels.

How did this economic recovery come about?

Dawes Plan - loans of 800 million marks from the USA, which also rescheduled reparation payments.

What did stabilising the economy result in?

• Resulted in costs of exports rising; therefore, industrialists looked to cut their costs, often by making workers redundant.

• Germany became heavily dependent on loans, which, if withdrawn would have a serious impact.

What happened to Germany’s agriculture?

Did not fully recover and was then hit by a depression in 1927 due to global overproduction.

What did farmers complain about?

That food was imported so that in return Germany could export industrial goods. Created resentment in countryside.

What new currency did Stresemann introduce?

The rentenmark.

Why do the golden years between 1923-29 stand out?

Because of the economic chaos of 1922-23 and Great Depression of 1929-33.

What were the strengths of the German economy during this time?

• Despite loss of resources as a result of the Treaty of Versailles, heavy industry recovered reasonably quickly.

How did industrial production recover so quickly?

• More efficient methods of production, particularly in coal mining and steel manufacture.

• Increased investment.

However, still held them back as this still meant 14 years trying to get back instead of progressing.

What currency did Stresemann introduce?

• The Rentenmark in November 1923.

• The Reichsmark in August 1924.

What banks were introduced with the new currency?

The rentenbank and reichsbank.

What was the effect of the new currency?

• Restored confidence in the currency as worthless mark destroyed.

• Some compensation for those whose savings destroyed by inflation, but so low many remained resentful and believed they had been betrayed by the Republic.

When was the Dawes Plan?

1924.

What did the stable currency mean?

Costs of exports increased. Forced industrialists to cut costs - workers made redundant.

Why were there high numbers of people entering the workforce at this time?

Baby boom before WWI. 5 million more people in workforce. However, also created unemployment.

What was the Dawes Plan?

US banker Charles Dawes made a plan.

US dollars financed an expansion in German government spending at both local and national levels.

How much did the Dawes Plan raise?

800 million marks in loans.