Economic developments

• The stabilization of the currency:

  Rentenmark introduced to replace the worthless Reichsmark. It was supported by a mortgage on all industrial and agricultural land. Government greatly controlled amount in circulation to prevent inflation. Eventually, Rentenmark became the Reichsmark,
• End of passive resistance:

  Resistance to occupation in the rhur was called of. Led to the Beer Hall Putsch. This greatly reduced government expendature as they stopped paying striking workers
• Balancing the budget:

  Cut government expendature and raised taxes. 300,000 civil servants lost their jobs. Government debt began to fall.
• Dawes plan:

  • the amount Germany paid each year in reperations reduced until 1929
  • Germany received an 800 million mark loan from USA
• Industry:

  • American loans helped stimulate the economy annd building of housing schools and roads
  • Industrial ouput grew unsteadily and didn't reach pre war levels until 1929
  • advances in chemical industry, large scale production of fertilisers
  • Massive population growth created a housing shortage but builders responded well
  • number of strikes declined due to compulsory arbitration
• Limits to economic recovery:

  • Position is only flourishing on the surface and Germany ' dancing on a volcano' that was american investment
  • By 1926 Unemployment reached 3 million
  • Companies reducing work forces to make savings
  • The mittlestant gained very little from 'golden age' and over 180 thousand white collared workers out of work
  • Farmers made little profit as food prices stayed low and a grain surplus led to a slump in 1925 and 6
• Young plan:

  This meant Germany paid reperations until 1988 and the total bill was reduced from £6.6 billion to £1.8 billion. Also ensured the withdrawel of troops from Rhineland by 1930