The stabilisation of the currency

When did Stresemanns government come to power?

August 1923 Stresemanns led a new coalition

What parties were in Sresemanns coalition?

It included parties form both the left and right consisting of:

• Stresemann’s own party the DVP

• The Centre Party

• The Socialists

• The DDP

How long did Stresemanns coalition last?

103 day

What did Stresemann do during his coalition?

• He was able to stabilise inflation

• Stabilise the currency

• Attempted to overthrow the republic from both the left and the right which ended in failure

What key steps did Stresemann do to bring inflation under control?

• The end of passive resistance

• The issuing of a new currency

• Balancing the budget

What was the reaction to Stressemann calling off passive resistance?

Passive resistance was called off in September which was highly unpopular and risky move leading to unrest and the Beer Hall Putsch in Munich - A difficult decision

Why did Stresemann call of passive resistance?

The economy was failing and it helped reduce the government expenditure

How did ending Passice resistance help inflation?

Ending passive resistance, which meant that the government stopped paying workers who refused to work for the French

What was the new currency called?

Rentenmark

When was the new currency issued?

November the new Rentenmark was introduced as a temporary currency

How was value given to the Rentenmark?

Germany did not have the gold reserves to back the new mark so it was supported by a mortgage on all industrial and agricultural land

How was the Rentenmark circulated?

It was kept under tight control with little being in circulation whilst the old inflated marks were gradually cashed in

What happend to the Rentenmark later?

August 1924 the Rentenmark became the Reichsmark and now was , backed by the German gold reserve that had to be maintained at 30% of the value of the Reichsmarks in circulation

What effect did the new currency have?

Inflation decreased and the new currency was established at home and abroad

What steps did Stresemann take to manage budget?

To balance the budget:

• Stresemann’s government cut expenditure and raised taxes

• Salaries of government employees were cut

• Around 300,000 civil servants lost their jobs

• Taxes were raised for both individuals and companies

What did the budget cuts allow?

Government debt began to fall allowing confidence was restored

How was the way Germany function effected by the balancing budgets?

The measures significantly changed how Germany economically operated:

• Well-managed companies that were run prudently and were careful not to build up excessive debt continued to prosper

• Weaker companies that were heavily reliant on credit crumbled

• Company bankruptcy went from m 233 in 1923 to over 6000 in 1924

• Those who had lost savings did not gain anything from the introduction of a new currency

How were well managed companies effected by the balancing of budget?

Well-managed companies that were run prudently and were careful not to build up excessive debt continued to prosper

How were weaker companies effected by the balancing of budget?

Weaker companies that were heavily reliant on credit crumbled

How many companies went bankrupt due to the balancing of budget?

Company bankruptcy went from m 233 in 1923 to over 6000 in 1924

How were those who lost their savings effected by the balancing of budget?

Those who had lost savings did not gain anything from the introduction of a new currency