Weimar Economy 1923-1929
- Created by: TDHChicken
- Created on: 22-11-16 15:20
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- Weimar Economy 1923-1929
- Hyper-Inflation
- The Rentenmark
- On the 15th of October 1923, by Decree, Stresemann withdrew the mark and introduced the Rentenmark.
- The decree also put a limit on how much money could be printed
- On the 17th of November Stresemann issued a decree banning the use of emergency money after November 22nd
- Overseen by Halmar Schacht
- He became President of the Reichsbank in Dec 1923
- The change restored faith in the German currency both at home and abroad
- Those who had savings objected because it had such a low value against one gold Mark.
- On the 15th of October 1923, by Decree, Stresemann withdrew the mark and introduced the Rentenmark.
- The Government used emergency decrees to control rents, wages and prices which helped to stabilise the currency.
- Schacht also helped to oversee the change to the Reichsmark (RM) in August 1924.
- The Rentenmark
- Foreign Policy
- See notes on Stresemann and Foreign Policy
- Business
- In the early 1920s, many small businesses collapsed
- In 1924, there were more bankruptcies than in the previous 5 years combined
- They remaining businesses formed cartels to fix prices and help stabilise the economy
- Biggest was I.G. Farben which was set up in 1925
- United several chemical based cartels which made everything from dynamite to fertiliser.
- Biggest was I.G. Farben which was set up in 1925
- Many factories were rebuilt to include new mass production methodfs
- In 1925, the chemical industry was producing one-third more than it was in 1913, and almost two thirds more by 1930
- Significant levels of dispute between workers and business owns during the Weimar period
- Workers pressed for better conditions as owners tried to cut wages
- Strikes and lockouts were common
- Fewer between 1926 and 1927 with economic prosperity but they never went away
- In October 1923, a state arbitration was set up to try and create a neutral way for the two sides to negotiate
- It gave the Government control over wages and working hours
- Between 1929 and 1929, over 60000 cases were taken to the case.
- Before 1924, they generally favoured the employers, but after that they made compromise rulings for both sides
- In 1928, the Ruhr industrialists refused to accept a compromise and locked the workers out. In the end the elite offered the compromise themselves
- These disputes harmed the industrial sector of the economy and drove wages up and productivity down.
- Trade Recovery
- Germany initially suffered from several heavy tariffs set up after American isolationism
- However, Germany was producing steel and chemicals which other countries desperately needed
- With German admission to the LoN, and other international agreements, German exports began to rise
- 1926 - Back to 1913 levels of 10 billion marks
- 1929 - Exports were 34% higher than in 1913
- Agriculture
- In the 1920s, between a third and a quarter of all works were agricultural workers
- Bigger farmers faired better than the smaller ones during the early Weimar years
- Most were heavily in debt and could not afford to pay interest in the loans or their taxes
- 1918 Reich Settlement Law
- This would make landowners sell land to the Government
- Landowners would block the selling by stringing out negotiations
- Influence of wealthy landowns also allowed thme to press for high grain subsidies which benefited those with big farms
- Government Spending
- The economy was build on foreign loans
- All funded through borrowing and taxation
- 1913 - Lowest tax band made up of 47%
- 1925 - 62%
- 1928 - 55%
- 1913 - Lowest tax band made up of 47%
- Spending
- Also spent heavily on social welfare and housing
- Spent heavily on subsidies for industry and agriculture
- Most ordinary people were not as well off
- Kept afloat by Government spending
- Hyper-Inflation
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