2.1) Germany: Economic developments

• August 1923, Hyperinflation at worst.
• Cuno's coalition replaced by Stressemann.
• First coalition with parties from left and right.
• Coalition made up of DVP, Centre party, DDP and Socialists.
• 103 days for him to fix currency and hyperinflation.
• Took 3 steps.

1) END PASSIVE RESISTANCE IN RUHR:

• September, unpopular and risky move.
• Led to Munich putsch.
• Economy and inflation were out of control.
• Stopped paying workers who were on strike. Reduced Government expenditure.

2) NEW CURRENCY:

• Replace Reichmark with Rentenmark. 1RTM = 1trillion RCM.
• Supported by mortgage on industrial and agricultural land.
• Once launched Gov controlled money circlulation.
• August 1924, Rentenmark replaced by Reichmark.
• Inflation removed. 
• Hjalmar Schacht helped

3) BALANCE THE BUDGET:

• Cut expenditure, rose taxes for people and companies.
• 300,000 civil servants lost jobs.
• Government debt fell.
• Changed economy.
• Business who avoided debt won.
• Small business and people who lost out during inflation lost.

• November 1923, Allies' reparation committee got financial experts to fix Germany financial concerns.
• USA wanted Germany to pay France so they could be re-paid through them.
• Banker Charles Dawes called. Dawes Plan finalised on April 1924.
• Made payments more manageable.
• Amount Germany paid each year was reduced.
• Started buy paying 1000m and raised 2500mm each year.
• USA loaned 800mm to get them started.
• Nazi's opposed this and Stressemann said it was Economic Armistice.
• July 1924, All agreed.

• Allies accepted German finanical problems were real.
• French left the Ruhr
• Loans allowed machinery, housing and economy to be rebuilt.

INDUSTRY:

• 1925, Germany was stable.
• New currency, Dawes plan and Schacht work helped.
• Kept interest rates high for foreign investment.
• Industrial output rose.
• But Growth rates were unsteady, 1924,25 and 27 were good but economy shrank in 1928-29.
• Investment in new factory machinery fell in 1929.
• Many Cartel were created, allowed profits to be reinvested.
• Tariffs were allowed for Germany, tax on foreign goods.

• Many industries developed, car, chemicals, etc.
• Inflation vanished.
• Living standard rose.
• Loans helped finance building school, houses and public works.
• 1926, 205,000 new homes.
• Money spent on welfare and health improvements too.
• 1924, new schemes of relief launched.

• Strikes in Germany fell becuase of Compulsory arbitration.
• Employers felt this was biased as they favoured unions and resented state intervention.
• 8hour working day and Tradeunions were apart of work councils.
• 1928, dispute over iron an steel industry wages in Ruhr. Small wage increase given.
• Employees refused to pay increase and locked out workers.
• Workers were paid by the state.
• Normal workers benefited by Tradeunions and wage increaeses after 1924.

LIMITS TO RECOVERY

• 1929, Stressemann said Germany is dancing on a volcano.
• 1925, Unemployment continued, 1m and 1926, 3m.
• Caused by Publics spending cuts, companies reducing workers to save money. 
• E.g, Mining companies reduced it by 56,000 between 1925-29.
• Middle class gained very little, bankcrupt by inflation.
• White collar workers didn't benefit from wage  increase in industrial sector.

agr

AGRICULTURE:

• Farmers never benefited, worldwide agricultural depression kept food price low.
• Small peasent farmers stored money but were wiped out during inflation.
• 1923, gov made it worse by making it easier for them to borrow.
• Famers were in debt during time of falling price.
• More tax for welfare was unfair on farmers.
• Late 1920's many farmers were bankrupt.
• Banks foreclosured farms.
• Agriculural production fell.

• Dawes Plan was temporary
• Allies still had Rhineland occupied, French refused to leave until final settlement of reparations issue was agreed.
• Stressemann and international committee Owen Young met in Paris to finalise a reparations issue.
• Young Plan wanted Germany to pay until 1988 with reparation reduced from £6.5b to £1.8b but annual payments increased. 
• Britian and France left Rhineland in 1930, German gov now responsible for reparations..
• Nationalist, Conservatives and Nazis not happy. 
• Attemped a 'freedom law'. 
• Wanted to remove war-guilt clause and arrest those that agreed with it.
• Referendum couldn't be held as never had enought signatures to be debated in Reicstag.
• 13% of electorate signed it, showed right wing supporters.
• Hugenburg helped Hitler become a political figure.
• Showed Germans were never satisfied with reparations.