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
- 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…