Weimar Economy- Changing Fortunes 1919-1929

Treaty of Versailles

Economy was at a low with a war debt of 144 billion gold marks- post war depression and economic dislocation
Made worse by Treaty of Versailles including:
Territory losses eg Alsace Lorraine to France, Rhineland demilitarised - led to a resource shortages
Colonial losses- German East Africa became British- again loss of resources
Reparations payments at £6.6 million to be paid at a rate of 20,000 million gm per year- decided at London Payment Plan May 1st 1921

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11th January 60,000 French soldiers with Belgian support invaded Ruhr as Germany was not paying reparations under Cuno
Government used passive resistance against the invaders but still did not pay reparations
Led to a more unstable economy and hyperinflation resulted as Government was forced to pay those involved in passive resistance
Unemployment and prices now all increases, German currency collapsed and then so too did the economy

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August 1923- new govt under Gustav Stresemann was created
Proposed ideas to recover economy included
Spet.1923 reparation payments to be resumed
Gold mark abolished replaced with Rentenmark
Balance the budget
Rentenbank (later Reichsbank) established with Hjalmar Schact as commissioner of currency
Passive resistance ended and paying workers went back to work

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Nov. 1923 Stresemann's govt. collapsed and he then became foreign minister
Germany went through a period known as the "Golden Years" 1924-29- period of economic calm- INTERPRETATION: "a stagnation between two crises"
Germany now adopted a policy of fulfilment whereby they would become secured and strengthened
Achieved by Stresemann through Dawes Plan of 1924
Committee for it produced their report in 1924 recommending French leave the Ruhr, reparations paid over a longer period of time, credit system to be set up to ease burden on Germany and Reichsbank was reorganised to not destabilise German currency, unemployment was reduced
Germany also became a member of LoN in 1928 through Treaty of Berlin
Also discussed through Chancellor Muller was the Young Plan- used when Dawes Plan ran out- not adopted until 1930
In October 1929 Wall Street stock exchange in USA collapsed- affected Germany as they were borrowing short term loans from USA
Weimar was now back to square one and they looked doomed forever

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