The Stresemann era

Reasons for Germany's recovery from Hyperinflation in the Stresemann era. Ranked from 1st down to 6th important (in my opinion)

  • Created by: Jhana1
  • Created on: 28-05-20 09:16

The Dawes Plan - August 1924

Stresemann worked alongside American banker, charles dawes to help Germany recover from its hyperinflation crisis.

It was agreed that the annual reparations payments would be dropped to 1 billion a year for the first 5 years, which would then increase to 2.5 billion a year.

America also loaned Germany 800 million gold marks to help them start this off.

Allies reassured that they would get their money -> French troops leave their occupation of the Ruhr -> passive resistante ends, and industry in germany starts up again.

As a result of this there is more money circulating Germany -> Economy rises -> employment rate rises -> hyperinflation drops.

Although some Germans were against the Dawes plan, due to it making them look weak and in need of help, most thought it was brilliant.

(In my opinion, it is the most important reason for why Germany recovered from hyperinflation in the Stresemann era)

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The Rentenmark - November 1923

A new currency created to help germany recover from its hyperinflation crisis.

Introduced by Stresemann, and linked to property (which at the time was very STABLE), issued in small amounts to control hyperinflation.

Stresemann also regulated the banks (stopped them printing more money)

As a result, there was more money circulating the country -> people could spend more money -> businesses grew -> economy rose.

Very important, however... not as important as the Dawes plan, because it was only a temporary currency, and was replaced in 1924 by the Reichmark,( which was used by Germany for decades)

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The Locarno Pact - 1925

Involved: France, Germany, Great Britain, Belgium, Italy, Czechoslovakia and Poland.

it was an agreement to accept new borders across all countries.

1. final french troops in the Ruhr were asked to evacuate.

2. Allied troops left the Rhine (this happened in 1927)

in return for this:

1. Alsace-Lorraine (taken from the French by Germnay in the late 19th Century) was returned to France finally.

It marked Germany's return (known as the Locarno Honeymoon) and Stresemann won a Nobel Peace prize. the population of germany grew more confident in their government -the Weimar Republic- and social issues started to straighten out.

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Kellogg-Briand Pact - 1928

Involved around 62 countries.

An agreement that weapons would only be used in self defense, not as a means to another war.

It was an American treaty, because they wanted to improve theitr own relations with the rest of the world. The Weimar Republic had become well respected enough to be allowed to sign the treaty.

The German public's confidence grew about their political parties, and social conditions across Germany stabilised, helping the economy to grow in the long-term.

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League of Nations - 1926

The League of Nations was the post-WW1 equivalent of the UN today.

Although origianlly after WW1, Germany was not allowed to join, in 1926, thanks to Stresemann, Germany became a member of the LoN.

This was because of the Locarno treaty in 1925, which helped the other countries feel more comfortable with Germany. It also helped lead the the first discussions of the Young plan in 1929.

Most Germans were angry and shocked at this new revelation, believeing that they were giving in to the demands of the rest of Europe, and agreeing with the Treaty of Versailles.

Some government confidence grew, due to the fact that they were now almost Allies with the other countries again, and allowed to discuss important matters, rather than be left on the outside.

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The Young Plan - 1929

Another American plan.

the reparations were to be cut from the original, £6.6 billion, to only £1.85 billion. Germany was also given another 59 years extra to pay the money.

The economy would have benefited massively, (with taxes being lowered, and more people being able to spend more money), however due to the Wall Street Crash later that year, the Young Plan never came to be.

The American bankers started to ask for their loans back so that they could save their own economy.

NOTE: the Lausanne conference (1930) suspended the reparations payments anyway. At this point Germany no longer had to pay back.

Although it could have been very important for Germany's recovery, as it never happened, it is the least important of Stresemann's treaties/plans that helped Germany recover from Hyperinflation

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