Stresemann

• In November 1923, Stresemann set up the Rentenbank and issued the new currency called the Rentenmark, which had its value tied to the price of gold so it had real value, and this encouraged more public confidence
• In August 1924 the Reichsbank was given control of this new currency, which was renamed the Reichsmark, and hyperinflation was over
• The Dawes Plan in 1924 temporarily reduced Germany's reparations payments to £50 million a year and US banks agreed to make loans to German industry
• The Young Plan in 1929 reduced the total reparations debt from £6.6 billion to £2 billion and allowed the payments to be made over a longer time, up until 1988
• Improvements in the German economy 1923-29

  • Industrial output doubled by 1928 and finally passed pre-First World War levels
  • Employment and trade increased
• However, the economic recovery depended on American loans, so remained fragile, and the extreme political parties were completely against Germany paying the reparations at all
• Gustav Stresemann's work as foreign secretary from 1923-1929 strengthened the confidence of the German people in the Weimar Republic and reduced the support for extremist political parties
• The extreme political parties were completely against Germany paying the reparations at all
• The economic recovery depended on American loans, so remained fragile
• Gustav Stresemann

  Resigned the chancellorship in November 1923, but stayed as foreign secretary until 1929
• Stresemann's work in foreign affairs


  • Strengthened the confidence of the German people in the Weimar Republic
  • Reduced the support for extremist political parties like the Nazis and the communists
  • Increased support for moderate parties
  • Reduced the economic hardships of the German people
• Stresemann was instrumental in making sure Germany was a member of three important international pacts or agreements: The Locarno Pact, the League of Nations and the Kellogg-Briand Pact
• Locarno Pact 1925


  Agreement between Germany, Britain, France, Italy and Belgium where Germany agreed to its new border with France improving relations with the French, and the Allies and Germany agreed to the permanent demilitarisation of the Rhineland, and German membership of the League of Nations was up for discussion
• Why the Locarno Pact was a success for Germany

  • It improved relations with France with the border agreement
  • The Locarno Pact was not imposed on Germany, unlike the Treaty of Versailles
  • It increased the status and popularity of the Weimar Republic
  • It helped boost confidence in more moderate political parties
• League of Nations

  A new international body that hoped to discuss world problems in order to avoid resorting to war, set up in 1920 but Germany was initially excluded, invited to join in 1926 and become a member of the council
• Why the League of Nations was a success for Germany

  • It showed that Germany's views counted
  • It boosted the confidence held by most Germans in the Weimar government
• Areas of discontent despite Stresemann's work

  • The hated terms of the Treaty of Versailles were still in place
  • The League of Nations was, for some, a symbol of the unpopular Treaty of Versailles
  • Some didn't like the confirmation of the new border with France
  • There were still extremist parties around
• Kellogg-Briand Pact 1928


  An agreement between 61 nations committing countries to avoiding the use of war to achieve foreign policy objectives
• Why the Kellogg-Briand Pact was a success for Germany

  • It showed that Germany was once again a major power
  • It showed that moderate political parties could build Germany's strength internationally
  • It increased public confidence in how Germany was being led
• Living standards improved after 1924, brought about by government funding and policies
• The Wall Street Crash in the US in October 1929 led to a worldwide depression, with the US stopping lending money to Germany and demanding all loans be repaid
• Effects of the Wall Street Crash on Germany

  • German businesses had to pay back loans, received no more investment from the US, and had to pay increased taxes

  The German government couldn't borrow money from the US, refused to print more money, increased taxes, and made cuts in unemployment benefit and government worker wages

  Millions of German workers and farm labourers lost their jobs, and families suffered terrible poverty
• The Wall Street Crash, USA, October 1929 resulted in US companies losing billions of dollars in value overnight, many banks and businesses being ruined, and worldwide depression
• The US stopped lending money to Germany and demanded all loans be repaid
• German businesses had to pay back loans, received no more investment from the US, and had to pay increased taxes to the government
• The German government couldn't borrow money from the US, refused to print more money, increased taxes, and made cuts in unemployment benefit and wages for government workers
• Businesses reduced staff or closed, millions of workers and farm labourers lost their jobs, and young people were badly affected by job losses. With no work, and benefits slashed, families suffered terrible poverty