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German History : 3 The Economy - Weimar Germany - Coggle Diagram
German History : 3 The Economy - Weimar Germany
Problems 1919-23
Increased political violence
Kapp Putsch in 1920
Spartacist uprising in 1919
Ruhr crisis Jan 2023
led to hyperinflation
high food prices leading to starvation
violence due to want for possesions
policy of passive resistance
Dollar worth 353,000 marks in July 1923 and December 4,200,000,000,000
high levels of unemployment - 7% in 1918 to 15% in 1922
reduction in industrial production - only 42% in 1919
Recovery 1924-28
Nov 1923 Rentenmark new currency introduced
August 1924 Dawes Plan
Loans from US which saved the economy
800 million gold marks
June 1929 Young plan replaces Dawes Plan
Currency commisioner Hjalmar Schact - an experienced banker
August 1923 Stessman Chancellor
Problems with the economy 1924-28
GNP growth was slow
Low income in the countryside reduced demand
German agriculture was unable to compete due to being small scale and unmodernised
international trade was also slow
600mil dollars being borrowed per year 1924-28
"Germany is dancing on a volcaneo"
Germany was dependant on short terms loans which could be recalled
Key features of Weimar economy
late 1920s cutting gov spending to tackle deflation
Weimar gov encouraged formation of cartels
wanted to eliminate competition
also wanted to prevent over production and stabilise prices
Cartel is a group of independent market participants to achieve goal of controlling prices and limiting supply
Use of new American Production techniques
Phneumic drills and conveyer belts
Taylorism which was to increase productivity and reduce costs
encouraged vocational training and education for skilled workforce
Law for the promotion of industrial rationalsation in 1924
Impact of the Great Depression
By 1932 industrial production in Germany dropped to 40% of its 1929 level
demand for steel shippping and chemicals fell dramatically from 1929-32
Young plan 1929 delayed reparation payments
June 1931 Hoover Moratorium
Bruning policy for tackling it was deflation
meant cut in gov spending and on social welfare
tax incraeses
wage cuts
had bug welfare cost and led to mass unemployment
"Hunger Chancellor"
Collapse of 2 German banks