- Created by: chelscoom
- Created on: 12-06-18 17:28
A financial programme in which a government does not spend more than it raises in revenue.
Imperial Germany encouraged people to invest in government funds in the belief that they were helping the war and their savings would be secure.
A currency that the market considers to be strong because its value does not depreciate.
When a government spends more than it raises in order to stimulate the economy.
Reaction of The Treaty of Versailles
Reaction of the government - Divided government and Scheidemann resigned. New coalition led by Gustav Bauer.
Reaction on the Right - The signing of the peace settlement was the final straw and led many to join groups committed to overthrowing the government,
Reaction of Pro-Republican Parties - They asked their main opponents in the DNVP, DVP, and DDP to state that those who had voted for the treaty were not being unpatriotic. Policy of fulfilment, comply with the terms of the treaty and to negotiate modifications.
Reaction of Former Soldiers - Not all soldiers who returned to Germany in the wake of the defeat were hostile to the new republic. Many working class soldiers, who had previously been members of trade unions, supported the new democratic system. Many however couldn't adjust to civillian life.
Economic Impact of Reparations
- Germany had to pay through either money, gold or coal. This was extremely difficult as they had lost a lot of money through the cost of the war and had lost a large part of its coal reserves to the Versailles Treaty.
- Another way to pay was through material goods but workers and manufacturers in the Allied countries would not agree as they saw it as a threat to their jobs and businesses.
- The allies were forcing Germany to pay reparations but making it difficult for them to do so.
- The German government decided to print more money, making inflation much worse and decreasing the value of the mark.
Political Impact of Reparations
- The cabinet of Fehrenbach resigned in protest at what is considered to be excessively harsh terms and was replaced by new leader Joseph Wirth.
- A reparations commission was set up to determine the scale of the damage caused by the German armed forces in Allied countries.
- Germany owed £6.6 Billion and had to be paid in annual installments. They realised that full payments were beyond their capacity.
- Germany asked to loan £500 million and to have 4 years to rebuild their economy before paying back, the French were suspicious and refused.
Winners of Hyperinflation
- Those who had debts, mortgages and loans.
- Black-marketers who bought up food stocks and sold them at vastly inflated prices.
- Those leasing property on long term fixed rents.
Losers of Hyperinflation
- Those who lent money to the government,
- Landlords reliant on fixed rents.
- Small business owners.
- War bonds.
Effects of the Occupation of the Ruhr
- Paying the wages or providing goods for striking workers was a further drain on government finances.
- Tax revenues was lost as businesses closed and unemployment increased.
- Germany had to import coal and pay for it with limited foreign reserves within the country,
- The resulting shortage of goods further increased prices.
- The combined costs of all of this amounted to twice the annual reparations payments.
Who was to blame for hyperinflation?
THE FRENCH AND THE BRITISH GOVERNMENT
- The allies hampered Germany's export trade by confiscating its entire merchant fleet, and later, by imposing high tariffs on imported German goods.
- The French occupation of the Ruhr was an unnecessary aggressive response.
- The British Labour Party demanded peace. It saaw Germany as the martyr of the oist-war period and France as vengeful and the principal threat to peace in Europe.
- The reparations payments were simply to high for Germany to keep up with.
Who was to blame for hyperinflation?
THE GERMAN GOVERNMENT
- The German government were financially irresponsible during WW1 - printing more money only made the problem worse.
- Many powerful German industrialists benefitted from inflation. They took out shsort term loans, which, when due for repayment, were reduced in value.
- Passive-resistance did more harm than good.
- The German government in the past war years allowed inflation to spiral because it suited their foreign policy objectives. They could use the rapid decline in the value of German currency to argue for reduced payments.
1919 - A law was passed limiting the working day to a maximum of eight hours.
1919 - The state health insurance system, introduced by Bismark but limited to workers in employment, was extended to include wives, daughters, and the disabled.
1919 - Aid for war veterans incapable of worling because of injury became the responsibility of the national governmen: aid for war widows and orphans was also increased.
1922 - National Youth Welfare Act required local authorities to set up youth offices with responsibility for child protection and declared that all children had the right to an education.
A broad term meaning government by non-democratic.
Those who signed the November Armistice and a term of abuse to criticise those who supported Werimar.
Nationalist views associated with Aryan Racism.
Opposing change and supporting a return of traditional ways.
- In Janurary the German communist party decided that they wanted to take over Germany from Ebert. They started a revolution attempt on 6 January. It was not successful. In a week, Ebert with the help of his Friekorps had stopped the rebellion and killed many communists.
- The Spartacist leaders, Roas Luxemburg and Karl Lieberkheicht, were murdered.
- Ebert had to rely on Friekorps and they could turn on him at any point.
- When the government of Stresemann called off passive resistance in September without any concessions from the French, there was an outcry from the right.
- Appointed Gustav von Kahr as state commissioner.
- There was a growing agitation for a 'March on Berlin' to overthrow the government.
- Hitler's job was to visit political parties and decide whether they were right wing, left wing, or centre political parties.
- He worked with the Education Department of the army lecturing soldiers about the dangers of communism, socialism, and pacificism.
- In September 1919 Hitler went to a German workers Party meeting which was led by Karl Preler. The party was anti-communist and extremely right wing nationalism.
- Hitler wrote out the beliefs in the 25 point programme showing the party containing a mixture of right wing nationalism, anti-capitalism, anti-socialism.
- Born on 9 April 1865 near Posen in Prussia.
- He went to the army at 18.
- He was appointed to the German general staff.
Dawes Plan, 1924
- The conditions of the Dawes Plan were to start paying with 1000 million gold marls. This would be raised annually over five years by 2500 million marks. After this the sum paid should be related to German industrial performance.
- Germany should receive a large loan of 800 million marks from the USA to help to get the plan started.
- The allies accepted that Germany's problems with the payment were real.
- Loans were granted, with which new machinary, factories, houses, and jobs could be provided and the Germany economy rebuilt.
The Young Plan, 1929
- The Young Plan obliged Germany to continue paying reparations until 1988. The total bill was considerably reduced, with Germany required to pay £1.8 Billion instead.
- The annual payment was increased.
- All foreign control ended and the responsibility for paying reparations was placed solely on the German government.
- In return, Britain and France agreed to withdraw all their troops from the Rhineland by June 1930.
- The new leader of DNVP launched a nationwide campaign against the plan, which involved other conservative groups.