Germany's Recovery After 1924

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Germany's Recovery After 1924

Having survived foreign occupation and internal subversion from the

Rightt and Left, the Republic found its situation improving. The

immediate crisis was halted by the courageous realism of Gustav

Stresemann, who was appointed Chancellor in 1923. A genuine Liberal

and leader of the German Worker's Party, Stresemann ended the policy

of passive resistance and slashed government expenditure. He then

proceeded to introduce the Rentenmark as a temporary currency which,

being based on a mortgage of all land and industry to the value of

3200 million gold marks was theoretically secure and quickly helped to

stabilizese the economy. With his finance minister Hans Uther,

Stresemann concluded the Dawes Plan (1924) came a loan of 800 million

Gold Marks, mostly from the USA, which enabled Germany to initiate a

general economic recovery and to pay annually in reparations only what

she could reasonably afford. This was carried a stage further by the

Young Plan of 1929 which reduced the reparations total from £6,600

million to £2000 million, to be paid in annual installments over 59

years. This effectively settled the reparations issue (reparations

were actually cancelled by the 1932 Lausanne Conference).

Due to these various measures the German economy rapidly recovered

between 1924 & 1929. There was a boom in such industries as iron,

steel, coal & chemicals. The gas and electricity industries were

nationalized. Industrial cartels were established; real wages &

production exceeded pre-war levels; working hours were shortened and

social insurance was extended.

Stresemann also had a number of foreign policy succ...

... middle of paper ...

...redit and high interest

rates. Industry fared somewhat better, but dearer money caused a high

level of unemployment which stood at 1.8 million even in the peak year

of 1928. Most importantly loans for its continued prosperity and

Stresemann prophetically warned that "Germany is dancing on a

volcano…. if her short term loans are recalled, a large section of our

economy will collapse". Overworked and underappreciated, Stresemann

died of kidney failure in September 1929, thus robbing the Republic of

one of the only talented statesmen that it was to produce. Without his

steadying influence the DVP and the Reichstag quickly slipped to the

Right, where the charismatic figure of Adolf Hitler continued to wax

noisily about the failings of the "November Criminals" and built up

popular support through his spellbinding oratory.

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