In what year did World War I come to an end?
November 1918
This marked the beginning of significant social and economic challenges for the new Weimar Republic.
What was the reparation amount set by the Reparations Commission in April 1921?
£6.6 billion
This amount was compensation for Germany’s role in causing World War I.
At the Treaty of Versailles, Germany lost what percentage of its arable land?
14%
This loss was part of the harsh terms imposed on Germany after the war.
What were the percentages of resources Germany lost at the Treaty of Versailles?
1. Iron ore
2. Coal deposits
3. Fishing fleet
- 75% of its iron ore
- 26% of its coal deposits
- 25% of its fishing fleet
These losses severely impacted Germany’s economy.
True or false: After World War I, Germany had 12 million refugees within its borders.
TRUE
It also lost millions in population due to its political boundaries being redrawn.
What was the exchange rate of the German Mark to the dollar in 1914 and 1920?
1914: 1:4 to the dollar; 1920: 1:40 to the dollar
In August 1914 Germany abandoned the gold standard and Germany only had 2.4 billion in gold reserves.
What was the first repayment amount made by the Weimar Government in 1922?
£50 million
They defaulted after making the payment. There was a wide gap between Germany’s ability to pay and her enemies perception of what she could. The Allies gave Germany no latitude:
- They refused to accept payments in the devalued Marks and demanded gold or to be repaid in Sterling.
- The allies refused postponement of repayments.
What did the French do in response to the 1922 default of the Weimar government and what was the effect?
In January 1923 the French occupied the Ruhr with Belgian assistance. If the Germans couldn’t pay
in gold or Sterling they would pay in coal and iron ore.
The effect was:
- Workers in the Ruhr went on strike, output fell to 50% of it’s 1913 level.
- The Weimar government decided to continue paying the workers while they were on strike, triggering hyperinflation.
- The Mint was working overtime to print currency causing:
- The currency became worthless. Those on fixed income or workers with savings lost everything.
- A penny postage stamp bought in 1923 cost as much as a country villa in 1890.
- Doctors fees spiralled, children’s health was neglected.
- The Weimar government with it’s system of checks and balances was in danger of loosing the support of the middle classes.
- Many argued that “things were better under the Kaiser”.
How did Gustav Streseman do in response to the almost certain political anarchy in 1923? (5 points)
- He orchestrated an economic recovery between 1923 and 1929.
- He created political stability with neighbouring countries.
- He introduced a new currency the “Rentenmark” which had the guilt edged security in the form of all land used by Industry and agriculture.
- He ordered the workers in the Ruhr to return to work.
- He followed a policy of fulfilment arguing that Germany would never restore it’s international standing if it did not meet it’s financial commitments
The issue of occupation of the Ruhr remained.
What was the Dawes Plan of 1924?
Provided a loan of $800 million and set a new repayment schedule
The loan was to be used to re-equip industry, build schools, hospitals and finance other infrastructure programmes. The plan led to France and Belgium evacuating of the Ruhr.
Germany was said to be “dancing on a volcano”. A financial volcano.
What was the Young Plan of 1929?
- Promised a loan of £60 million
- Extended repayment timescale to 59 years
- Reduced reparations to £4.4 billion
The plan was never implemented due to the Wall Street Crash.
Just before the Wall Street Crash of 1929, what was Germany’s financial position? Provide 3 points to justify your answer.
Germany was vulnerable but appeared to be on the brink of recovery:
- Chemical, iron and steel industries were thriving and were huge employers.
- Tax returns were healthy
- The Young Plan added to the optimism
By 1932, how was Germany’s agriculture sector doing?
There were structural problems in Agriculture:
- Low crop yields.
- Diminishing livestock numbers.
- The Powerful “Junker Class” of landlords got in the way of much needed reform.
- The rural population were completely disillusioned with the Weimar government.
- German agricultural output in 1932 was only 65% of what it had been in 1929.
- Between 1919 and 1938 it never reached pre-WW1 output levels.
What were the consequences of the Wall Street Crash for Germany? (7 points)
- Speculators went bankrupt
- Banks called in loans
- International trade ground to a halt
- Demand for raw materials shrank
- Price of manufactured goods collapsed
- Inflation returned
- Unemployment numbers spiralled
Streseman died a month before the Wall Street Crash. The crash had devastating effects on the already fragile German economy.
Who was known as the ‘hunger chancellor’ and what policies did introduce?
Heinrich Brüning executed methodical deflation:
- cut salaries and pensions.
- introduced price controls on agriculture.
- He imposed strict controls on the banks.
He was appointed in March 1930 and removed in May 1932. His policies contributed to the collapse of the Weimar government in 1932 as people looked elsewhere for solutions.
What was Hitler’s first four-year plan? How was it financed? What are notable successes?
Between 1933 and 1936, Hitler aimed to modernise Germany and make Germany self-sufficient. It was financed by:
- Public loans
- Foreign Borrowing
- Printing of more notes
- A system known as credit creation
Hitler appointed Fritz Todt to:
- Creation of the autobahn motorway system that employed 200,000 people and cost 6 billion marks
- Revolution in Motor industry which went from 70,000 cars in 1931 to 340,000 cars in 1938 and employed 1 million people
- Flourishing building industry with the introduction in 1933 of the “Law to reduce unemployment” that replaced slums with cheap housing
- Commercial ventures were encouraged such as timber mills and mines
By 1935, there were still 1.8 million people out of work. Relative to other countries the recovery was not spectacular but propaganda made it seem so. Agriculture output remained low during 1930s.
What was the Reich Labour Service Act of 1935?
The Reich Labour Service Act of 1935 setup up a variation of military service under the name Reich Labour Service which required all men aged 18 to 65 to work on public work schemes and women to work as domestics or on farms.
The service also provided recreational facilities for workers “strength through joy”. While factories, businesses and banks remained in private hands, they had to work in the interest of the regime. These public work schemes were government funded, caused inflation but this was offset by tax collected from benefiting private companies. What emerged was not nationalisation but state directed capitalism. This was part of Hitler’s efforts to reduce unemployment and prepare the country for war. Hitler’s economic policy was mostly the work of Hjalmar Schacht, the economic minister from July 1934. Schacht was demoted by 1936 as Hitler was not happy with the over reliance on food imports and the effect on the payments deficit.
Who was Schacht’s replacement as economic minister in 1934 and what was he told to do?
Göring was appointed to replace Schacht as economic minister. 4 year plan memorandum from Hitler required him to:
- make Germany self-sufficient particularly in food
- produced strategic materials to be used in the war effort at a much faster rate
- introduce foreign exchange and import controls to aid self-sufficiency
- allowed only international trade that had a clear financial advantage
Göring’s interventions kept the German economy going until 1942. It was helped by the conquest of Norway, Denmark and France.
Who was Albert Speer and what was h?
Albert Speer replaced Fritz Todt following Todt’s death in 1942. During the war, Todt and Speer ensured experienced managers ran key areas of the economy under various committees. They had 14 million people entirely under their control. Speer managed to triple aircraft construction by 1944. However, the German economy was ready for a European war but not a Global war which transpired.
What was the economic effect on the allies of the USA entering the war?
When the USA entered the war the Allies had unfettered access to almost limitless resources.
- The USA produced 300,000 aircraft and 86,000 tanks.
- It gave $84 billion to the UK and $11 billion to the USSR to finance the defeat of the Germans.
- Hitler’s territories produced 60 million barrels of oil while the allies produced 2,200 million barrels of oil per year.
What was the impact of aerial bombing by the Allies on the German economy during WWII?
Had a devastating impact on German cities and industrial complexes
By 1945 the German economy was back where it had started in 1919. Due to the threat of Communism there were to be
no reparations or Treaty of Versailles this time. Marshall aid saw to that.
In what year was Germany one of the founding members of the European Economic Community?
1957
This marked a significant step in post-war economic recovery and integration.
