Reasons for recovery 1923-29



  • From 1923-29 Germany managed to recover from the immediate crisis of 23
  • Still significant weaknesses in the economy 
  • Gustav Stresemann, the new chancellor, palyed an important role 
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  • November 1923- Stresemannset up the rentenbank and issued a new currency called the Rentenmark 
  • Supply of the notes were tightly controlled  
  • Its value tied to the price of gold so it had real value 
  • -Encouraged more public confidence 
  • August 1924, Reichsbank given control of the new currency 
  • renamed the reichsmark 
  • Hyperinflation over  
  • Reichsmark was good for the recovery of the economy but couldn't bring back the losses from thr hyperinflation crisis 
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International loans after WW1

  • Germany paid the reparations payment to Britain and France
  • Britain and France paid back war loans to USA
  • USA made loans under Dawes and Young Plan
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The Dawes Plan 1924

  • 1924- American Banker, Charles Dawes designed a plan so Germany could pay its reparations 
  • Instalments temporaraily reduced to 50 mil a year 
  • US banks agreed to make loans to German industry 
  • Allies more confident that they would get reparations payments 
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Young Plan 1929

  • August 1929- commitee set up by allies and american banker, Owen Young proposed a plan
  • Young Plan reduced German reparations payment to 2 billion not 6.6 billion
  • Payments over a longer time period 
  • Lower reparations meant lower taxes for German people 
  • There was lots of opposition from extreme political parties, like the Nazi's Because they felt they were extending the burden for future generations 
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Improvements in the economy

  • industrial output doubled by 1928 and finally passed pre-war levels 
  • employment & trade increased 
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Problems with Economy

  • Extreme political partoies against Germany paying reparations 
  •   Fragile Economy-Economic recovery depended on American Loans
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