Recovery after 1923

• Gustav Stresemann


  • Stresemann had been a member of Germany's parliament since 1907
  • After Germany's defeat in the war, he felt that the only way Germany could be accepted by other European countries was to agree to the Treaty of Versailles' terms
  • Stresemann was briefly the Chancellor in 1923, but is best known for his work as Germany's Foreign Minister from 1924 until his death in 1929
  • He faced several issues
• Issue 1: Hyperinflation crisis - German money was worthless


  Stresemann's solution

  • He stopped the printing of the old paper money and replaced it with a temporary, new currency called the Rentenmark
  • This could be exchanged for the old currency
  • In 1924 the Rentenmark was replaced by the Reichsmark, a stable currency that remained for the next 25 years

  Success?

  • Yes
  • Germans quickly accepted the new currency and hyperinflation ended
  • However, people who had lost all their savings never got their money back, and blamed Stresemann and his government
• Issue 2: French and Belgian troops invaded the rich industrial area of the Ruhr when Germans stopped paying reparations


  Stresemann's solution

  • He met with the American Vice President, Charles Dawes, and arranged for the USA to lend money to Germany (800 million gold marks)
  • Germany could now begin to pay what they owed, and a repayment schedule was agreed which saw Germany restart their reparation payments
  • This deal was known as the Dawes Plan

  Success?

  • Yes
  • French and Belgian troops left the Ruhr
  • However, some Germans felt Stresemann had 'given in' to the bullying tactics of the French and Belgians, and should have demanded an end to the reparations altogether
  • In 1929, through a new agreement called the Young Plan, Stresemann negotiated the reparations down from £6.6 billion to £1.8 billion - and Germany was given longer to pay it
• Issue 3: Since the First World War, Germany's status in the world had declined. Stresemann was determined to improve Germany's image abroad


  Stresemann's solution

  • He worked hard to improve Germany's relationships with other nations
  • In 1925, Germany signed the Locarno Pact with Britain, France, Belgium and Italy
  • They promised to never invade each other
  • In 1926, Germany joined the League of Nations, an international peacekeeping organisation which Germany had been banned from when it was first set up in 1919
  • In 1928, Germany signed the Kellogg-Briand Pact
  • The participating countries agreed never to go to war, unless to defend themselves if they were attacked

  Success?

  • Germany regained its international status and became an important part of the League of Nations
  • However some right wing Germans criticised Stresemann for not demanding back some of the land that had been taken from Germany by the Treaty of Versailles
• Issue 4: German industries were in trouble after the war. Factories were run down, and there were few jobs and poor schools, housing and hospitals


  Stresemann's solution

  • As well as using some of the money Germany borrowed from the USA to pay reparations, Stresemann used it to build new factories, houses, schools and roads
  • This meant more jobs, with Germans earning more money
  • Some American companies built factories in Germany too

  Success?

  • Slowly, Germany became more prosperous and many Germans were better off
  • For instance, sales of radios rose from 1 million in 1926 to 4 million in 1932
  • However, some Germans, even Stresemann himself, feared that Germany relied too much on the American loans
• Fully recovered?

  • Stresemann, one of Germany's most able politicians, died of a stroke in 1929. His time as Chancellor and Foreign Minister had seen Germany enter a new era of peace and prosperity. In fact, there were no attempts to overthrow the government between 1924 and 1929. However, there were still some underlying problems in Germany:
  • There were still many political parties in Germany, and no single party could ever get enough votes to rule on their own. This meant that parties were always joining up with others in order to rule together, but often fell out with one another because they found it hard to agree on their priorities and spent a lot of time arguing
• Fully recovered? pt.2

  • Political parties with extreme ideas, like the Nazis and the Communists, continued to hate the politicians in the Reichstag. Hitler, for example, had expanded the Nazi Party since he'd been released from prison, but for now, Hitler found it difficult to persuade millions of Germans they needed to vote for him (when the country was doing so well). In 1924, about 5 percent of Germans voted for the Nazis. By 1928, their support had dropped and only around 2 percent of Germans were voting for them
  • There were still large groups in German society that were in trouble: farmers' incomes were really low and the middle classes had had their savings wiped out by the hyperinflation of 1923
  • Much of the prosperity was created by the American loans. Germany was not prepared to pay them back yet