Please enable JavaScript.
Coggle requires JavaScript to display documents.
Germany 2/4, Economic developments - Coggle Diagram
Germany 2/4
German recovery after 1923-Dawes plan
Dawes Plan, April 1924, terms:
Reparations bill of £6,600m remained but amount paid each year reduced
Germany to pay 1000m Marks immediately (a fraction of the owed amount)
Annual amount paid would be according to industrial performance
Germany would receive a loan of 800m Marks from USA
Reichsbank to be reorganised and a new currency established
Economic consequences of the war
Over 2 million soldiers died and over 4 million wounded in war
Germany shunned by the international community for trade even after armistice
National Debt rose from 5000 million to 144, 000 million marks by 1919
Industrial output down 40% 1914-18
Estimated 500,000 deaths from Spanish flu
Adjustment from war time economy
Growing inflation
Government difficulty in paying off war time issued treasury bills
Food shortages - blockade still in place until signing of treaty of Versailles in june 1919
35% of all trade on the black market
Inexperienced workforce
Hyperinflation-Rapid increase in the general price level
Causes
Cost of war - national debt 144,000m Marks
Government issued treasury bills repaid by printing more money
Industrial output down 40% over course of war
Productivity rates declined by 4% a year over course of war
Food and fuel shortages
35% trade activity on black market
Losses caused by Treaty of Versailles - including loss of merchant fleet
Reparations
Ruhr occupation and government response of ‘passive resistance’
Other causes for German recovery
Negotiation of the Rapallo treaty with USSR in 1926 - signing of the Treaty of Berlin
Creation of a new currency - the Rentenmark
Participation in the Kellogg-Briand Pact in 1928
Membership of the League of Nations
Negotiation of the Locarno Treaty in 1925
Appointment of Hjalmar Schacht as head of the Reichsbank.
Work of Schacht:
Rationalising of industry, introducing new technology and forming cartels - 300 by 1926
The Young Plan was negotiated in August 1929 and reduced annual reparations payments by 75% by extending the period to 59 years.
Heavy industry made recovery, partly due to increased productivity
Improvements in industry:
Improvements in industrial relations and living standards
Advances in chemical, electrical, shipping and motor industries
Reintegration into the international community:
Economic developments