French Occupation of the Ruhr
Germany was facing many economic and social problems, so it became almosy impossible to pay their reperations. Germany were further crippled by the war, resulting in the payments of the reperations being even more devastating.
In Jan 1923, Belgium and France invaded to the Ruhr, a highly industrial area of Germany. They intended to use all the resources made in the Ruhr to compensate for the unpaid reperations.
German workers refused to co-operate with the French and the Belgians, so they went on strike.
Hyperinflation was mainly caused by the printing off of too much money. The Weimar began to print off more money to pay reperations and helping the strikers of the Ruhr and their families. This then became hyperinflation as the mark began to drop significantly.
People who had savings or were on a fixed income found themselves penniless. Workers who were also paid by the hour, their money became worthless because prices rose so high before they had started their shift. Hyperinflation even affected the rich as their savings and money were no where near the amount the mark was rising by.
JULY 1914 £1 = 20 MARKS
NOV 1923 £1= 1,680,800,000,000,000
The Economic Work of Stresseman
The Dawes Plan- The main points of the plan was: 1) Reperations would start at 1 billion marks for the first year and would increase over four years to 2.5 billion marks per year. 2) The Ruhr area to be evacuated by allied forces. 3) The German Reichsbank to be reorganised under supervision of the allies. 4) The USA to give loans to Germany to help economic recovery.
US Loans- The loans began at 800 million marks, but over the next 6 years US companies and banks gave loans up to $3000 million.
The Rentenmark- Stresseman created a new currency to fix the value of the German currency. It was called the Rentenmark and was based on property values rather than gold reserves. In the following year, Stresseman reintroduced a currency based on gold reserves called the Reichsmark.
The Young Plan- It was further consideration of the reperations payments. The payment was reduced by three quarters from £660 million to £1850 million. The length of time was also extended to 59 years at 2.05 billion marks per year.
Stresseman's success abroad
The Locarno Treaties- Stresseman was determined to restore relations with France and the Allies and realised that France needed to feel secure in order to co-operate. In 1925, the Locarno Treaties were signed by Britian, France, Belgium, Italy and Germany. The countries agreeded to keep existing borders between Germany, Belgium and France.
The League of Nations- For the Lorcano treaties to come into action, Germany had to join the League of Nations, to try and maintain peace. In September 1926, Germany became a permanent member. This confirmed Germany's return to "Great Power" and gained considerable prestige for Stresseman. He used his role in this to bring about the Young Plan.
The Kellogg-Briand Pact- In 1928, Germany signed this along with 64 other nations. It was agreeded that they would keep their armies for self defence and solve all international disputes "by peaceful means". As a result: 1)French withdrew from the Ruhr. 2) The Allies agreed the to the Dawes plan and the Young plan. 3) In 1927 Allies troops withdrew from the west banks of the Rhineland, five years before it was originally agreeded.
These all led to political stability within Germany. The Social Democrats always won the most votes. It saw generally less support for extremist groups. This was due to Stresseman and Hindenburg, who were both very popular.