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Economic Stability in Weimar Germany 1924-1929
Weimar before 1924: (see notes on economic threats)
The Weimar Republic was born out of German defeat in World War I. Many
associated the Weimar Republic with the defeat and the hated Treaty of
Germany struggled to accept democracy and both left-wing and right-wing
extremists attempted to undermine Weimar democracy.
1923 A year of crisis for Weimar. The Munich Putsch, the French occupation of
the Ruhr and Hyperinflation; this all caused huge problems for the Republic.
Positive view of achievements:
+ "Stresemann...worked hard to rebuild his shattered country and for peace and
co-operation abroad." The Times, 4th October 1929.
+ "Greatest statesman since the days of Birsmarck." British ambassador, Sir
+ "He could not have achieved more." Adolf Hitler according to Ribbentrop.
Gustav Stresemann became Chancellor of Germany in August 1923 in a time of
economic crisis (French occupation of the Ruhr, hyper-inflation, separatists' active
in the Rhineland, Hitler in Bavaria and Communists in "Saxony Summer 1923".)
Stresemann wrote to his wife Kate that to become Chancellor in such
circumstances would be `all but political suicide.'
September 1923: Stresemann agreed to resume payment of reparations.
November 1923: Hans Luther, finance minister establishes a new currency called
the Rentenmark (then renamed Reichsmark in 1924 and is backed by gold
reserves = has worth).
November 1923: Currency is sustained and stabilised by mortgage bonds covering
industrial and agricultural assets, sacking 700,000 state employees to balance
budget and establishment of a new central bank under Hjalmar Schacht called the
April 1924: Passing of the Dawes plan. This plan worked under the slogan
"business, not politics." Germany is given longer to pay the reparations (pay 1,000
marks a year until 1929 and then pay 2,500 million marks a year after 1929). It
also included a loan of 800 million marks to kick-start reparations and generates
The establishment of a new bank and the Dawes Plan meant France and Belgium
agreed to leave the Ruhr.
1924-1929/1930: Massive investment in the German economy. Between
1924-1930, 25.5 billion marks invested in the German economy from other
countries especially from USA.
1925-1929: Exports rose by 40%.
1927: Stresemann introduced reforms to make life better for the working classes
Labour exchanges 1927 and unemployment pay.
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National income in Germany was 12% higher than it was in 1913.
1929: Young Plan. The `time-frame' for payment of reparations would be extended
(paid over next 59 years) the amount to be paid would be reduced (cut from 2,500
million marks a year as agreed in 1929 to 2,000 million marks a year). Germany
saved 1,700 marks between 1929-1932 as a result of this plan.
1929: Industry output had reached its pre-war levels again by 1923 and the figure
actually doubled by 1929.…read more
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February 1929: 17.7% of population unemployed. Unemployment actually rose.
- Budget deficit exacerbated by the creation of `insurance fund'.
- 1927: The Law on unemployment insurance stated that the fixed benefit had to be
paid to all those who out of work and insured.
- Employment at only 1.3 million.
- 19281929 (Wall Street Crash): Unemployment figures rose rapidly. The 342 million
marks were borrowed to fund this scheme creating severe financial problems.…read more
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For what reasons did the German economy show signs of recovery in the period 19241928?
Welfarism extended in the Weimar Republic which highlights commitment of the Weimar
Governments to provide a decent standard of living for all in Germany. The Insurance Law of 1927
allowed 17 million workers to be protected in the event of unemployment.…read more