Economic Development

Cards (4)

  • End of hyperinflation
    Took just 3 months
    Passive resistance called off in the Ruhr which meant goods were back in production
    Ruhr occupation ended as reparations began to be repaid
    Rentenmark introduced which stabilised prices and made money rise in value
    Government began to spend less money so budget deficit would reduce
  • Renegotiating reparations
    Dawes Plan (September 1924) - lowered reparation payments so they were easier to pay and loaned 800 million marks from USA
    Young Plan (January 1930) - reduced amount of reparations to be paid by 20% and allowed for postponed payments, paid over 59 years until 1988, US banks continued loaning money
  • Positives
    Industrial production levels increased Exports increased by 40%
    Hourly wages rose yearly
    German company IG Farben became the largest industrial company in Europe
    Generous pension/health/unemployment schemes introduced from 1927
  • Negatives
    Agricultural production did not recover to pre-war levels
    More was spent on imports than exports - loss of money
    Unemployment increased
    Industry became dependent on US loans
    Had to continue to run deficits