Hyperinflation and Stresemann

• What started the Hyperinflation?

  • Germany already bankrupt, war reparations
  • French Occupation of the Ruhr- 1923
  • Loss of Ruhr crippled Germany, contained 80% of Iron coal steel. Caused unemployment.
  • Prises went up
  • unable to get money from tax
  • Printed money.
  • Prices went sky high, hyperinflation
• Impact of hyperinflation

  • People had to carry money around in wheelbarrows,
  • workers paid twice a day
  • money became worthless
  • foreigners came to have a holiday because things were so cheap
  • savings became worthless, middle classes hid worst
  • Business failed and collapsed
• Stresemann became Chancellor and Foreign secretary of Germany when Ebert appointed him.
• Stressemans Economic recover plan:

  • New currency- Reichsmark - 1923
  • The Dawes plan -1924
  • The Young plan-1925
• What are positive outcomes of the Reichsmark?


  People trusted the Reichsmark

  Gained confidence and stability to economy

  other countries can trade with Germany again
• Negative of reichsmark?


  Middle classes savings all gone, too late to save.
• What was the 1924 Dawes plan?


  Germany reparations lowered to 50 million a year. Americans loan Germany 35 Billion.
• Pros of Dawes Plan

  • No longer under stress to pay reparations
  • French occupation of Ruhr ended
  • Industrial production doubled
  • People can pay taxes again
  • Germans happy with outcome
• Cons of Dawes plan?


  Extreme political parties angered Germany still payed reparations.

  Some saw that Germany would never recover dependent on loans.
• What was the 1929 Young plan?


  Stresemann negotiated with USA and Germany reparation down to 2 Billion. Given 59 more years
• Pros of the Young Plan :

  • Helped workers , as lower taxes
  • Germans had more money to spend, Boost economy
  • 85% happy with Young plan.
• Cons of young plan?


  Extremum parties, were angered and Hitler argued that extending the loan passed the penalty onto the unborn

  Payments still 50 million a year.
• Stresemann's Foreign policies:

  1. Locarno Pact 1925
  2. Joined league of nations 1926
  3. Kellogg Briand Pact 1928
• What was the Locarno Pact 1925?

  • New border with France, promised peace, Rhineland demilitarise
  • Nations negotiate with Germany
  • Stresemann made Germany look weak, NSDAP hated how Stresemann agreed to new borders. Signed a pact with Europe countries, germany finally allowed to play part in foreign agreement.
• What was the Kellogg Briand Pact 1928, and pro/con

  • Promised not to use war to achieve aims
  • Proved germany peaceful , stable, respected
  • Made germany look weak
  • Some germans hated the agreements and though germany making friend with previous enemies.
• Ebert died 1925, and Hindenburg becomes President.
• Stresemann dies in same month as Wall st crash. (1929)