The Weimar Republic: How far was there stability in the years 1924-29?

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  • Created by: naomi
  • Created on: 06-05-13 22:27

Gustav Stresemann

After the hyperinflation crisis, Gustav Stresemann became Chancellor of Germany in August 1923. Leading a broad coalition of political parties, in his first 100 days (and afterwards was foreign minister for the rest of the period - gets Germany economically going again), Stresemann made a series of initiatives:

  • he called off passive resistance (asked French to leave) and began to pay reparations again
  • with the help of the Finance Minister, Hans Luther, he cut government expenditur, e.g. by sacking 700,000 public employees
  • he appointed Hjalmar Schacht, economist, to oversee the introduction of the Rentenmark, a new currency
  • he arranged for a conference to consider the plight of Germany and as a result, the Daws Committee and the Dawes Plan were arranged 
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But why else did Weimar Survive?

  • big businessmen do well out of hyperinflation so were not hostile to Weimar e.g. Huge Stinnes (industrial leader) owned around 20% of German businesses after hyperinflation
  • France was blamed for the hyperinflation crisis as much as Weimar Germany
  • unemployment did not rise significantly; people had jobs at the end of the crisis 
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How stable did Weimar become ECONOMICALLY

1. Industry's performance improved

  • Industrial production increased: it more than doubled from the end of 1923 to 1929
  • Germany's exports increased by 40% - income - this was because hyperinflation had allowed big compaies to buy up smaller ones (e.g. the chemical company IB Farben or the coal/iron/steel company Vereinigte Stahlwerke which controlled 50% of production). They had greater purchasing power and could reduce costs. (Buy in big bulks - buy cheaply - can sell cheaper - more countries keen to buy - more exports)

2. Real wages increased every year from 1924-29

  • they went up by around 1/3 over five years, thus increasing support from the working-classes. This meant that workers were happier - fewer working days lost to strike e.g. 3 million (1925) down from 12.35 million (1923)
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How stable did Weimar become ECONOMICALLY

3. the government got its budget under control

  • the burden of reparations decreased (they never rose above 4% of GNP in this period (partly to do with the Dawes plan), ususally being as low as 2% 
  • the budget defecit decreased (i.e. the amoutn the government was spending compared with the amount of income it had) - in 1923, the budget deficit was 22%; by 1924 it was 1% and never rose about 2%. This was one of the key reasons why Weimar got into trouble economically in 1919-23 (the government tried to pay its debts by deficit (financing) and this concern was now gone. 
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German economic weaknesses 1924-29

1. The German economic recovery was dependenton foreign loans/investment

  • under the Dawes Plan (1924) Germany was given 18,000 million marks p.a. Only 11,000 of this was spent on paying reparations. The rest was pumped into the economy. It would have been much better if Germany had been able to raise more money itself, but savings had been discouraged as a result of hyperinflation and Germans were less willing to invest in the German economy. Therefore, foreign investors propped large parts of it up, and if that source of investment were to vanish, the German economy would suffer. In short, the German economy was especially vulnerable to a world economic slump - 'Dancing on a volcano' (reliant on loans - vulnerable to crash e.g. Wall street Crash)

2. Unemployment was very high throughout the period

  • it was always higher than the period from 1919-23, usually above 5% and peaked at 10% in 1926. This was partly because of the age structure of Germany and the fact that there were a high number of school leavers, meaning the available workforce went up by over 1 million in this period.
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German economic weaknesses 1924-29

3. Some sectors of the economy performed very badly

  • agriculture performed very poorly in the period 1924-29, Taking agricultural prices as 100 in 1913, they reached 138 in 1927 (i.e. they were 38% higher than 1913 prices) but they then fell back to 132 in 1928 and 126 in 1929 (i.e. they fell 12% in two years) meaning that farmers and agricultural workers became poorer and more hostile to Weimer (farmers were important supporters of the Nazis!)

4. The government introduced additional social benefits

  • these (such as compulsory unemployment insurance, introduced in 1927 and covering 17 million workers - it was only cost-effective if the number of unemployed was below 800,000) were popular but did cost the government a significant amount o money e.g. the government spent 26% of GNP on social benefits and government spending on housing was 33x higher in 1929 than 1913 - Conservative groups don't like this - hostile to it - think they shouldn't be spending money on benefits
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Politically - German political strengths

1. More people are voting for pro-Weimar parties between 1924-29

  • May 1924 election - 39.4% anti-Weimar parties, 52% pro-Weimar parties 
  • May 1928 election - 13.3% anti-Weimar parties, 72.8% pro-Weimer parties
  • March 1933 election - 64.2% anti-Weimer parties, 34.2% pro-Weimer parties

2. Hindenburg (ultra-Conservative and anti-Weimar) as elected President in 1925 but did nothing to undermine democracy 

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German political weaknesses

1. The Weimar constitution still caused weaknesses for Weiamr

  • proportional representation meant that there were six coalitions between 1924-29, all of them short lived. This meant that it became a struggle to gain any coherent sense of policy
  • the voting system (in which people votes for a list rather than for a candidate led to dissatsfaction with Weimer) and the voter turnout fell to the mid-70s% from 90s% in 1919/20

2. The failure of democractic parties to serve the Weimar effectively

  • the moderate left (SPD) refused to work with the moderate right (DVP) and vice-versa and would vote with an extremist party to bring down the other
  • other parties, such as the Catholic Party (z-central party), moved to the right. Its leader Bruning (later Chancellor) increasingly favoured an authoritiarian form of government
  • small right-wing anti Weimar groups supported by e.g. farmers grew in this period, winning 78 seats in the 1930 election. They were eventually to be hoovered up by the NAzis
  • the Liberal Party supported by middle-class groups declined, which Detlev Peukert called 'the decisive event of Weimar politics' 
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German political weaknesses

3. Hindenburg was elected as President

  • he asked the ex-Kaiser's son for permission to stand in the election!
  • AJ Taylor: "He refused to betray the republic but he did not rally the people to his banner".

4. Controversies and the lack of pride in Weimar

  • the flag controversy: the black, red and gold flag (the new Weimar flag) which was linked with the 1848 revolutions was opposed by conservatives who wanted the old Imperial flag (black, white and red)
  • there were no heroes in Weimar. Bookblinder "pride was severely lacking in Weimar"
  • 'Totalitarin temptation'

5. The underlying hostilities of elites

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German political weaknesses

6. Weimar culture and its effects in undermining Weimar 1924-29

Examples of culture in Weimar:

  • literature
  • stab in the back challenges
  • cinemas + films
  • painting Otto Dix
  • singing - Marlene Dietrich
  • Liberal - cultural experimentation - 1st gay clubs in Berlin
  • Berlin has 40 theatres
  • Kazz clubs become popular
  • architechture  

People in rural areas don't like it... Partially, the Weimar culture was damaging in Weimar 

Weimar looks politically stable on the surface, but due to certain groups they were getting continually weakened. 

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Stresemann's foreign policy

Politically, Stresemann's foreign policy is damaging domestically

e.g. many argued he should have stopped paying reparations 

       many on the Right Wing especially e.g. DNVP, supported by old elites, such as Prussian               Junkers, landowners, big businesses etc

e.g. he agreed to keep Germany's Western Borders with France, as agreed in the TOV, at the Locarno Conference, 1925 

e.g. agrees to stick to disarmament terms of TOV

Economically

The Dawes Plan stopped the hyperinflation crisis of 1923, allowing Germany to pay reparations. Allowed Germany to (mostly) balance its budget and spend on e.g. warfare

BUT in the long term, Germany was over-reliant on US loands, which provoked a crisis in the 1930s 

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