Reasons for economic recovery
- Created by: MiaKaria
- Created on: 30-05-19 16:37
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- Reasons for economic recovery
- Rentenmark
- Nov 1923- Sress set up new state owned bank, Rentenbank which issued new currency - Rentenmark
- Aug 1924 - new independent bank, Reischbank, given control of the new currency
- renamed it Reischmark
- was backed by German gold reserves
- now trusted at home and abroad (trade) and hyperinflationat an end
- Aug 1924 - new independent bank, Reischbank, given control of the new currency
- supply of notes strictly limited
- Value tied to price of gold and backed by industrial plants and agricultural land. Currency had real value
- Nov 1923- Sress set up new state owned bank, Rentenbank which issued new currency - Rentenmark
- Dawes Plan 1924
- reparations temporarily reduced (£50 mil a yr)
- US bank agreed to give loans to German industry
- Bad as relying on loans and extremist parties won't like this
- Fragile economic recovery depended on American loans
- Industrial output doubled (1923-28) passing pre-war standards
- employment, trade and income from taxation increased
- Extremist parties angry G. had agreed to pay reparations
- Young Plan (1929)
- created by another American
- reduced total reparation debt from 6.6bil to 2bil
- given extra 59 years to pay
- lower reparations allowed gov. to reduce tax on people
- meant people had more public spending power
- this boosted industry and created more jobs and the jobs boosted public spending power which again boosted industry and employment
- Virtuos cycle of economic growth
- this boosted industry and created more jobs and the jobs boosted public spending power which again boosted industry and employment
- meant people had more public spending power
- annual payments still high and now stretched until 1988
- French agreed to leave Rhineland (1930)
- Increased confidence of Germans
- Recovery in foreign relations
- Locarno pact, 1925
- signed 1 Dec, was a treaty between Germany, Britain, France, Belgium, Italy
- agreed on equal terms, not like diktat (G had a say)
- G. accepted new 1919 border w. France
- France promised peace w G.
- agreed Rhineland would be permanently demilitarised
- extremist parties not happy - G. given up land
- five powers agreed to open talks about G.becoming member of League of N.
- made war in EU less likely
- G. treated as an equal
- boosted prestige of W/R
- boosted confidence of G. people in moderate parties
- boosted prestige of W/R
- signed 1 Dec, was a treaty between Germany, Britain, France, Belgium, Italy
- Locarno pact, 1925
- Rentenmark
- Stresemann wanted to fix economy, foreign affairs and increase prestige
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