recovery

• The Stresemann Era (1924-1929) - Economic Recovery

  The Weimar Republic overcame some of their difficulties with the help of Gustav Stresemann. He was Chancellor in 1923 and Foreign Minister from 1923-29. Between 1924 and 1929, German citizens came to accept the Weimar Republic, and so did international powers.
• Stopping hyperinflation

  • To help stop hyperinflation, Stresemann called off passive (non-violent) resistance in the Ruhr.
  • In November 1923, Stresemann set up a new currency called the ‘Rentenmark’.
  • Unlike the previous currency, Rentenmark was tied to the price of German land and held real value.
  • In August 1924, this currency was renamed the Reichsmark and placed under the control of the Reichsbank. With this new currency, hyperinflation was stopped.
• The Dawes Plan, 1924

  • Stresemann helped negotiate the Dawes Plan, which helped Germany pay their reparations (payments to the victors).
  • In 1924, Banks in the US loaned 800 million Reichsmarks to German industries.
  • Reparation instalments (fixed regular payments) were temporarily made £50 million a year.
• The Young Plan, 1929

  • Stresemann next negotiated the Young Plan, which proposed to reduce German reparations (payments to the victors).
  • In 1929, the Young Plan planned to lower the total reparations from £6.6 billion to £2 billion.
  • The payments would continue until 1988.
• The Wall Street Crash and the Young Plan

  • The Wall St Crash abruptly stopped the Young Plan in 1929.
  • American banks had to recall loans made to Europe, undermining (reducing the effectiveness of) the Young Plan.
  • By 1933, 4 years after the Wall St Crash, world trade had fallen by over 60%. This got rid of any chance of German success through exporting (selling to other countries).
  • German exports had risen 40% between 1925 and 1929.
• Economic recovery

  • To an extent, the economy did recover.
  • By 1928, industrial production levels were higher than they were in 1913.
  • Between 1925 and 1929, exports rose by 40%.
  • In 1927, the Weimar Republic set up a number of pension, health and unemployment schemes to help German society.
• The insecurity of the economy

  • But the economy was not completely secure.
  • Economic recovery depended on American loans.
  • Unemployment was still a big problem for Germany.
  • Germany spent more money on imports than they received on exports, a ‘trade deficit’.
• The Stresemann Era (1924-1929) - International Recovery

  To an extent, the Weimar Republic overcame their difficulties with the help of Gustav Stresemann. As well as helping the domestic economy, Stresemann was crucial to Germany re-entering European politics.
• Foreign policy achievements

  • Stresemann’s key foreign policy achievements were the Locarno Pact, League of Nations and Kellogg-Briand Pact.
  • Because of his domestic (at home) and foreign achievements, the German population became more confident in the Weimar Republic.
  • Their support for extremist parties, such as the Communists and Nazis, weakened.
• Locarno Pact, 1925

  • In 1925, Germany signed an agreement with Great Britain, France, Italy and Belgium called the Locarno Pact.
  • In this pact, Germany recognised their borders with France and the demilitarisation (withdrawing military from an area) of the Rhineland.
• League of Nations, 1926

  • In 1926, Germany was invited to join the League of Nations.
  • US president Woodrow Wilson set up the League of Nations, which was an international peacekeeping body.
• Kellogg-Briand Pact, 1928

  • In 1928, Germany signed the Kellogg-Briand Pact with 62 other countries.
  • In this pact, countries agreed to disarm (give up or reduce armed forces) and not use war to resolve disagreements.
• The Treaty of Rapallo, 1922

  • The 1922 Treaty of Rapallo improved German-Russian relations.
  • Curiously the Russian Communists agreed to allow the German army, the Reichswehr, to use Russian training camps which the USA, Britain, and France could not discover. This would allow the German army to train with tanks, banned under the Treaty of Versailles.
• Internal threats to the Weimar Republic

  • Despite the achievements, the Weimar Republic still faced potential threats.
  • The German population still resented (felt bitter about) the Treaty of Versailles and the League of Nations.
  • Although support for extreme left and right-wing parties had declined, the Communist and Nazi Parties still existed.
• Gustav Stresemann

  Gustav Stresemann was Chancellor in 1923 and Foreign Minister from 1923-29. Between 1924 and 1929, German citizens came to accept the Weimar Republic, and so did international powers.