How did Germany recover from the crisis of 1923?

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Who was Stresemann?

Stresemann was Chancellor from August to November 1923 and was then foreign minister until his death in October 1929. He wanted to restore Germany to its former glory and restore its position in Europe as a trusted trading partner. 

Stresemann's achievements

As Chancellor, Stresemann solved the immediate financial problems by:

  • introducing a new currency
  • calling off the passive resistance
  • resuming payments of the reparations
  • deposing left-wing state governments

The new currency, 1923

In September 1923, a new currency, the Rentenmark was introduced and the old currency was scrapped. Some advantages of this was that by strictly limiting the amount of currency in circulation, German money was stabalised. On the other hand, the same thing could happen to this currency that happened to the old one. 

The Dawes plan, 1924

An American banker, Charles Dawes drew up a plan saying that large American loans were to be made available to help the German economy recover. Payments of reparations would be on the basis of what Germany could afford. This is an advantage as Germany could now afford to pay back the reparations slowly in a way that would not cripple the economy. However, the Americans could demand to take this money back with very little notice. This lead to the 2nd ecenomic crsis in 1929.

The Locarno treaties, 1925

These were signed by Germany, France, Belgium, Britain and Italy. They agreed to accept the boundaries


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