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Empire to democracy: Economic developments, The Young plan - Coggle Diagram
Empire to democracy: Economic developments
Impact of the war, post war problems
To finance the war, treasury bills were introduced. They borrowed money from anyone who was prepared an they would be payed back later.
Since productivity was lowered during the war, the value of the mark was worth 20% less than its pre-war value. By November 1923 the currency was worthless
Germany had to pay a 6.6 billion mark payment in reparations on top of the post war damage
The occupation of the Ruhr worsened the economic situation by paying wages for striking workers, losing tax revenue, and more
The Dawes plan
Germany would pay 1000 million marks immediately
USA would loan 800 million marks to get the plan started
Germany would reorganise the Reichsbank and set up a new stable currency
Industrial growth
Throughout 1927, 1928, and 1929 industrial production exceeded pre-war rates
Examples of growth include: advances in the chemical industry, the electrical industry with things such as electric lighting and radios, and car and aeroplane industries
By 1919, industrial production was just 1/3 of what it was in 1913, due to loss of land, materials, plants and workers
Agriculture
Agriculture failed to make the same recovery as the industry
Agriculture suffered greatly during the war from the loss of unprotected rural labour, which left the fields to women and older men
Stresemann
Ending of passive resistance
Established a new Reichsbank and currency in 1924.
Reduction in government expenditure.
Hyperinflation, 1923
Passive resitance menat that the governmnt had to pay the workers. in order to do so, they printed more omney.
This resulted in hyperinflation as the currency became worthless.
French and Belgian troops invaded the ruhr in 1923.
People lost life savings and many were thrown into poverty. However, those with mortgages and debts benefited.
The Great Depression, 1929.
The October 1929, Wall street crash.
By 1932, 6 million people were unemployed.
Due to the Dawes and Young plans, the german economy was heavily reliant on US loans.
The Young plan
Reduced annual payments by extending the period of payments to 59 years
Ended the allied supervision of German banking
Reduced the reparations bill by 75%