Stresemann’s political and economic policies

• The Dawes Plan included 3 key terms:

  ❖A temporary reduction in the annual reparations repayments to £50 million.

  ❖US banks and businesses offered loans worth 800 million marks to German industries and businesses.

  ❖The German State Bank, the Reichsbank, should be reorganised and supervised by the Allies
• What were the benefits to the Dawes Plan?

  There were 3 main benefits of the Dawes Plan:

  • ❖American loans helped industrialoutput to double between 1923 and 1928. Employment, income tax and trade all increased as a result.
  • ❖The French and Belgians left the Ruhr as they were promised that they would receive reparations as result of the Dawes Plan.
  • ❖The Weimar Republic became politically stronger as the economy improved.
• What were the criticisms of the Dawes Plan?

  There were 2 key criticisms of the Dawes Plan:

  • ❖In the short-term, both the extremeleft-wing and extreme right-wingpolitical parties were angry Germany was still paying reparations imposed by the Treaty of Versailles.
  • ❖In the long term, because the Weimar economy was dependent on US loans, Germany could be economically damaged if these were suddenly recalled.
• The Dawes Plan was signed in October 1924 by Charles G Dawes and Streseman
• Charles G Dawes was an American banker who had been appointed by President Coolidge to negotiate with the Germans over their debts
• Dawes agreed to reduce the amount of money Germany paid in reparations from $6 billion per year to $500 million per year
• Under the Dawes Plan, Germany received a loan of $200 million from the United States which allowed them to repay some of their outstanding debts
• What did the Young Plans terms state?

  Total reparations debt reduced from £6.6billion to 2 billion, payments in 59 annuities, set up the Bank for International Settlements to handle the transfer of funds, and ended foreign controls on German economic life
• What were drawbacks of the Young Plan?


  The annual payments were still £50 million per year, they now stretched out until 1988, it didnt solve the German economic crisis and in the 1930s due to the world depression Germanys ability to pay the reparations dwindled away
• Why was the Young Plan overall positive

  Lower reparation payments allowed the government to lower taxes on ordinary people, meaning quality of life improved as overall people had more disposable income
• What was the Locarno Pact?

  The Locarno Pact of 1925 was an agreement signed on 1st December 1925 between Britain, France, Belgium, Italy and Germany. Stresemann believed that through signing the Pact, it would increase confidence in Germany amongst her own people but also other European powers
• Three main aims of the Locarno Pact (1925)

  1. To secure borders of the nations of Europe after the First World War. Germany agreed to the border with France, and as a result France agreed that they would be in a state of peace with Germany. 
  2. To ensure the permanent demilitarisation of the Rhineland. This was a key condition argued for by France. France had been invaded several times in the previous century by Germany, so France was understandably weary about German military force. 
  3. To begin negotiations to allow Germany into the League of Nations.
• How was the Locarno Pact different from the Treaty of Versailles?


  The Locarno Pact aimed to maintain peace in Europe through mutual agreements, while the Treaty of Versailles imposed harsh penalties on Germany after World War I. The Locarno Pact was agreed on by Germany rather than being forced upon them by other countries. Stresemann saw the pact as a triumph as it made war less likely in Europe and contributed to his recirv of a Nobel Peace Prize in 1926
• When was the Kellog Briand pact signed and what did it promise?

  In August 1928, Germany and 61 other countries signed the pact. It made them agree to renounce war as an instrument of national policy and to settle all international disputes by peaceful means.
• Stresemann's foreign policy successes led to him winning the Noble Peace prize in 1926. He used this prestige to negotiate further treaties such as the Kellogg-Briand Pact which promised to end war as an instrument of national policy. However, he died in October 1929 just months before Hitler came to power. His legacy is mixed - some argue that he saved Germany from collapse whilst others believe that he failed to address the underlying problems within Germany and left the country vulnerable to Nazi takeover.
• Stresemann's domestic reforms were limited due to opposition from conservatives who controlled the Reichstag. He faced strong opposition from right wing groups like the Nazis and communists. Despite these challenges, he managed to introduce social welfare measures including unemployment insurance and health care schemes. These helped improve living standards for many Germans, particularly those affected by high levels of unemployment during the Great Depression.
• Stresemann's foreign policy achievements included securing Germany's place in the League of Nations, reducing reparations payments under the Dawes and Young Plans, and signing the Locarno Pacts which guaranteed Germany's western borders. These diplomatic efforts helped restore Germany's reputation internationally and boosted morale at home.
• However, Stresemann's foreign policy successes were not universally popular. Some critics accused him of selling out Germany's interests and compromising its sovereignty. Additionally, his reliance on French support meant that Germany remained economically dependent on France, limiting its ability to fully recover from the devastating effects of WWI.
• Why was the Kellog Briand Pact a step forward?

  International cooperation- Germany was now included amongst the main powers, not dictated by them. Weimar Republic was now a respected stable state, which boosted Germany and other European countries confidence
• What were the drawbacks of the Kellog Briand Pact?

  Lack of enforcement mechanisms, and had no effect on changing or removing the hated terms of the ToV
• What was the League of Nations?

  The League of Nations (1920 – 1946) was the first intergovernmental organization established “to promote international cooperation and to achieve international peace and security, it would discuss ways of solving the worlds problems without resorting to war
• Germany was admitted to the League of Nations in September 1926, joining all the other great powers
• Germany was allowed to sit on the League of Nations Council, similar to today's United Nations Security Council, which was a great honour for them
• Joining the LoN boosted the confidence of foreign powers and moderate Germans in the Republic and Stresemann himself
• Extremist parties detested Germany joining the LoN as they saw it as an extension of the Treaty of Versailles, which was a source of national embarrassment
• When did Stresemann set up a new currency and state owned bank?

  the Rentenmark, was introduced on November 20, 1923, strictly limited quantities. Backed by a mortgage on the entire industrial and agricultural resources of the country. Process was difficult but succeeded Hjalmar Schacht, made president of the Reichsbank on December 22, 1923.
• What happened in August 1924?

  Reichsbank, national bank given control of this new currency (Rentenmark) renamed the Reichsmark. It was backed by Germanys gold reserves, ended hyperinflation
• Unemployment Insurance Act 1927


  16 million workers paid 3% of wages to help support them if they were ever out of work or away due to illness, would recieve 60 marks a week
• Work, wages, housing and other impacts

  Real wages rose by 25% from 1925-28,

  Housing-1923: shortage of a million homes, 1925-29- 37000 new homes built.

  Other improvement: 13750 war veterans, 400000 widows paid, 110000 students were in Higher Education by 1928 compared to 70000 in pre war years
• How did Stresemanns policies impact hyperinflation?

  By introducing a new currency German money was now trusted at home and abroad, hyperinflation ended. Successful-new currency was backed by German gold reserves, but couldnt bring back the losses of those people ruined by hyperinflation