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topic 2 The recovery of Germany, US loan and german economic recovery -…
topic 2 The recovery of Germany
key terms
League of Nations
An international organisation established to preserve peace and settle disputes by negotiation and arbitration.
Diplomacy
The use of negotiations and agreements to reach decisions and resolve differences between countries.
Depression
The sudden collapse of international trade and the rapid increase in unemployment affected millions worldwide throughout the 1930s.
Rentenmark
The currency was introduced in Germany in response to hyperinflation.
Dawes Plan
A set of recommendations that followed an international conference led by American economist Charles Dawes to discuss Germany’s post-1918 economic problems.
Young Plan
An attempt to restructure German reparations payments.
Locarno Pact
An international agreement confirming the territorial changes made to Germany by the Treaty of Versailles.
Kellog-Briand Pact
An international agreement to renounce war as an instrument of foreign policy.
The strengths and weaknesses of Stresemann's domestic policy
Gustav Stresemann and the Great Coalition Government, 1923
in 1923 germany was in crisis which was due to hyperinflatoin, the occupaiton of the Rhur.
the credit for recovery should mainly go to Gustave Strsemann who was the chancellor in 1923 and lead the great coalition government which made inprovemnts to the economy
more houses built
investment in transport systems
fall in unemployment
the rentenmark
as a result of hyperinflatoin the german mark was worthless
this lead to him inplementing a temporary currency which was introduced in november of 1923
the printing of the rentenmark was tightly controled
he promest to extainge the nots for land or industry if it failed which ment peole had confidence in the money
in 1924 a new national bank opend called the reichsbank which handed and controled the countrys money
in the smae year the reichsmark was introduced
the daws plan
USA sent Charles Dawes (1923) to help Germany’s economy
Aim: solve Germany’s economic crisis + make reparations manageable
key terms
USA loaned Germany 800 million gold marks → boosted industry
Reparations reduced:
1,000 million marks (first 5 years)
Then increased to 2,500 million marks
Payments reviewed regularly based on Germany’s ability to pay
France agreed to withdraw troops from the Ruhr
Allies gained some control over:
Reichsbank
German railways
Future missed payments handled jointly by Allies
Benefits
Helped restore German economy
Increased industrial growth
Led to further US loans (25 billion marks over 6 years)
The extent of the economic recovery
Causes of Recovery
Stability in currency after 1924
Increased foreign investment, especially from the United States
Support from the Dawes Plan
Industrial Growth
Investment used to:
Boost industry
Build factories
Industrial output doubled (1923–1929)
Living Standards Improve
Wages increased
Cost of living decreased
Overall standard of living improved
Confidence & Stability
Confidence in the economy restored
More stable government finances
Government Spending
Investment in public services:
Roads
Schools
Public buildings
Social Improvements
By 1927:
Unemployment benefits introduced
‘Labour exchanges’ set up to help people find jobs
The Young Plan, 1929
Reparations cut to $8 billion
Payments over 59 years
Germany only had to pay ⅓ annually if possible
Effects
Lower payments → lower taxes
More money for industry + jobs
France left the Rhineland early (1930)
Opposition
German nationalists unhappy (still paying reparations)
Alfred Hugenberg led protests (4 million signatures)
Referendum: only 14% against
The strengths and weaknesses of Stresemann’s foreign policy
Locarno Pact
Key Points
Germany accepted western borders & Alsace-Lorraine = French
No war except self-defence
Eastern borders settled peacefully via League of Nations
Countries Involved
Germany, France, Belgium, Britain, Italy, Poland, Czechoslovakia
Impact
Improved European relations → “Locarno Honeymoon” (1925–29)
Stresemann won Nobel Peace Prize 1926
Opposition
Nationalists angry: accepted Treaty of Versailles terms
League of Nations
Purpose
International organisation formed after WWI
Solve world problems without military force
Prevent another war like WWI
Origin
Idea by Woodrow Wilson (US President)
USA did not join (avoided European politics)
Membership Issues
Germany excluded initially (defeated nation)
Other defeated nations also excluded
Germany Joins
Date: September 1926
Key Figure: Gustav Stresemann
Persuaded great powers to allow membership
Linked to Locarno Pact (improved international relations)
Significance: Germany gets a place on the League Council
Council members make important decisions
Impact in Germany
Positive:
Boosted moderate parties supporting Stresemann
Increased public confidence in Weimar regime
Seen as Germany being accepted into the ‘international family’
Negative:
Some Germans saw it as a symbol of the Treaty of Versailles
Opposed involvement
Kellogg-Briand Pact
Overview
Signed August 1928
62 countries including Germany, USA, France
Aim: Prevent future war
Countries promised not to use military force to settle disagreements
Origin / Naming
Named after US Secretary of State Kellogg and French Foreign Minister Briand
USA used the pact as a way to be involved in international peace (since it wasn’t in the League of Nations)
Impact on Germany
International Status:
Germany included among main powers
Improvement in Germany's relations with other countries
Domestic Confidence:
Showed Weimar Republic was respected and stable
Public confidence in moderate political parties increased
Limits / Opposition:
Did not change Treaty of Versailles
Some Germans still opposed it
key dates
1923 - Stresemann became Chancellor
1923-29 - Stresemann was Foreign Minister
1926 - Stresemann won the Nobel Peace Prize
1924 - Dawes Plan
1925 - Locarno Treaty
1926 - League of Nations
1928 - Kellogg-Briand Pact
1929 - The Young Plan
US loan and german economic recovery
Gustav Stresemann’s Economic Strategy
Germany’s economy could not recover until reparations were sorted
Solution: accept the Treaty of Versailles (temporarily)
Foreign Policy Approach
Improve relations with:
Britain
France
Policy: cooperation instead of resistance
Goal: create trust → negotiate better terms later
Public Reaction
Very unpopular in Germany
Many Germans hated the Treaty of Versailles
Seen as accepting blame for WWI