The Recovery of Germany

Paper 1 : Development of dictatorship : Germany , 1918-1945

The recovery of Germany, 1924-1929

• Work of Stresemann
• Rentenmark, Dawes and Young plan, US loans, Recovery of German economy

Rentenmark

• Temporary German currency established by Stresemann to tackle the hyperinflation.
• He abolished the old mark.
• This new currency is regulated by the central bank.
• Rentenmark was trusted by the people as they were given insurance that if the Rentenmark failed, the Government promised to exchange them for shares in German industry.
• Results :
  • Germany became stable.
  • Confidence in German currency was restored.
• By August 1924, Stresemann was able to replace the temporary Rentenmark with a permanent currency called the Reichsmark.
• The Reichsmark would be controlled by the Reichsbank.
• Confidence in currency and banking system rose as number of deposits into the bank increased.

Dawes Plan (U.S. Loans) (1924)

• Reparation costs were too high for Germany to pay.
• As a solution, Stresemann and Allies agreed on the Dawes Plan.
• The terms of Dawes Plan:
  • Annual payments were reduced to an affordable level.
  • American banks agreed to invest 800 million marks in the German industry.
• The effects of Dawes Plan:
  • Germany resumed reparation payments
  • The French left the Ruhr
  • The German…