The Recovery of Germany 1924 - 29

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Gustav Stresemann

  • August 1923, President Ebert appoints Gustav Stresemann as chancellor and foreign secretary.
  • November 1923, resigns as chancellor.
  • Remains foreign chancellor until 1929.
  • Led a number of policies which brought recovery to the Weimar Republic between 1924 and 1929.
  • The Rentenmark
  • The Dawes Plan
  • The Locarno Pact
  • The League of Nations
  • Kellogg-Briand Pact
  • The Young Plan
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The Rentenmark - 1923-24

Biggest problem was hyperinflation in 1923.

Stresemann abolished existing currency and setting up new, temporary one, the Rentenmark. The new notes were trusted because if the currency failed, the government promised to exchange them for shares in German land or industry.

By August 1924, Stresemann was able to replace the Rentenmark with a new, permanent currency, the Reichsmark. It was controlled by a new independent national bank, the Reichsbank.

Effect - confidence rose in currency and banking system.

Deposits in German bank rose from 900m marks at the start of 1924, to 4,900m marks at the end of 1926.

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The Dawes Plan - 1924

April 1924, Stresemann and Allies agreed on the Dawes Plan to decrease reparations.

  • Annual payments reduced to affordable level
  • American banks agreed to invest 800,000,000 marks in German industry

Effects:

  • Germany resumed paying reparations
  • French left the Ruhr
  • German economy recovered

Manufactured good sales doubled 1923-29. Unemployment fell in 1928 to its lowest in 10 years.

Most Germans were reassured by this economic progress. But extreme parties hater Versailles and furious that Germany had agreed again to pay reparations. Furthermore, fragile economy recovery depended on American loans.

Stresemann hoped other nations would trust Germany and treat them as an equal. That reparations would be reduced and other changes would be made to the Treaty of Versailles.

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The Locarno Pact - 1925

October 1925, Stresemann signs Locarno Pact with Britain, France, Italy and Belgium.

Germany agrees to keep to its new 1919 border with France and Belgium.

In return, Allies agreed to remove troops from Rhineland and discuss entry to League of Nations.

Effect:

Germany treated as an equal

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The League of Nations - 1926

1919, Allies founded League of Nations to work for world peace.

1926, Stresemann persuaded the League to accept Germany as a member.

Effect:

Germany was trusted and treated as an equal.

Got a place on the League's Council.

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Kellogg - Briand Pact - 1928

August 1928, Germany became 1 of 65 countries to sign Kellogg - Briand Pact.

- an international agreement by which states promised not to use war to achieve their foreign policy aims.

Effect:

Show Germany as a respectable member of the international community.

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The Young Plan - 1928

August 1929, Young Plan cut reparations from £6.6 billion to £2 billion, with 59 more years to pay. 

Strengthened Weimar Republic. Linked with other successes in economic and foreign policy, it made the new republic look trusted and stronger.

Didn't last:

  • Criticism of Young Plan. Still £50 million to pay per year, until 1988. Hitler said it was, "passing on the penalty to the unborn"
  • 3 October, Stresemann died of a heart attack
  • Late October 1929, a world economic crisis began. Germany plunged back into turmoil.
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