The Recovery of the Republic

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  • 1.3- The Recovery of the Republic, 1924-1929
    • Stresemann's Strategy
      • In 1923 Stresemann was appointed Chancellor and Foreign Secretary. He was only chancellor for 100 days but remained foreign secretary until 1929
      • His most important work was in foreign and economic policy to make politics more stable
      • He hoped to unite most Germans behind moderate parties to strengthen the Republic, stabilize the economy and regain respect for Germany in foreign affairs
    • Reasons for Economic Recovery
      • November 1923, Stresemann set up the new state bank, the Rentenbank, to issue the Rentenmark
      • The Rentenmark's vale was tied to gold and it's value was tied to land and industrial plants, giving it real value.
      • In 1924, the Reichsbank was given control of the new currency, and it became the Reichsmark, which was backed by Germany's gold reserves
      • The new currencies meant that German money was now trusted at home and abroad, ending hyperinflation. It gave Germany a much stronger basis for economic recovery
      • The currency changes could not, however, bring back money lost by those ruined in hyperinflation
      • The Dawes Plan was negotiated between Stresemann and America, to solve Germany's non payment of reparations in 1924
      • The Dawes Plan reduced reparations temporarily to £50 million a year and it was agreed US banks would give loans to German industry
      • Stresemann called off passive resistance in the Ruhr, which persuaded France to end their occupation, along with the fact that the Dawes Plan ensured that they would get their reparations. This made the republic more popular
      • The loans to the industry under the Dawes Plan improved the economy, increasing employment, trade and income from tax increased, and industrial output doubled from 1923-28.. This reassured most Germans of Weimar's ability to govern, strengthening them politically
      • Extreme parties were furious that Germany had agreed to pay reparations again in the Dawes Plan, and it also meant Germany's economy rested on American loans
      • The Young Plan in 1929 between Stresemann and the allies further reduced reparations, by £4.6 billion, and gave Germany 59 extra years to pay
      • The extreme parties hated the Young Plan since it was agreeing to reparations again and Hitler said that extending the payments was "passing the penalty onto the unborn"
      • Drawbacks of the Young Plan were that £50 million still had to be paid every year, and now for longer
      • However, the Young Plan was a sensible measure, since lower reparations meant lower taxes on the people. This released public spending power, boosting the economy and industry
      • The Young Plan also helped influence the French to leave the Rhineland in 1930
      • The Young Plan increased the confidence of German's in Weimar, and it was a success- a 1929 referendum showed 85% were in favour of it
    • Recovery in Foreign Relations
      • In December 1925, Stresemann signed the Locarno Pact, which was a treaty between Germany, Britain, France, Italy and Belgium.
      • In the Locarno Pact, Germany accepted it's new French border and promised peace with France, the Rhineland was permanently demilitarized by everyone, and talks about Germany joining the League of Nations were opened
      • The Locarno Pact was a triumph, because it made war in Europe less likely (Stresemann was given a Nobel Peace Prize in 1926) and it increased Germany's confidence in the Weimar Republic, since it gave them prestige- Germany and Weimar were being treated as equals again, this was not a diktat
      • Some hated the Locarno Pact because it confirmed the borders decided at Versailles
      • Germany was excluded from the League of Nations after the war. It was a body within which powerful countries discussed the world's problems
      • In 1926, Stresemann convinced them to let Germany in, and onto the council, where the most important decisions were made
      • Joining the League of Nations was a success, it made people more confident in the Republic, since the other countries were respecting Germany again, and because it gave Germany a platform to discuss and resolve problems, for example those with reparations, with other countries
      • The Kellogg-Briand Pact was signed in 1928 between 62 countries, and it stated that the countries involved would not use war to accomplish foreign policy aims
      • The Kellogg-Briand Pact showed that Germany was no longer dictated by the major powers, it was one of them. It also showed that Weimar was a respected state, and it increased German confidence in moderate parties to restore Germany to a position of power
      • Some Germans hated the Kellogg-Briand Pact, since it did nothing to remove the terms of the Treaty of Versailles
    • The Impact of the Recovery on Domestic Politics
      • The hardships of the German people were largely removed by Stresemann's strategies
      • Support for moderate parties rose by 8% and support for extreme parties fell by 12% between 1924 and 1929
      • In 1925, President Ebert died, one of the November Criminals. He was replaced by Hindenburg, which increased confidence in the Republic, since it gave it a strong figurehead (he was the Kaiser's former field marshal).
      • Hindenburg also reassured the middle classes, increasing support

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