Weimar Economy

Weimar Economy

1. Impact of the war

   • 1920 inflation 14x higher than 1913
   • Unemployment remained low
     • encourage us to give loans
   • curreny value fell to 20% of prewar levels
   • Germany relied on treasury bills and war loans
     • Inflation after the war
       • debt grew from 5000m to 144,000m marks
   • Treaty of Versailles
     • Recieved no more reperations from Russia
     • £6.6b in reperations
     • France Italy and Belgium receive free coal
     • Saar given to french
     • Lost its colonies

2. Ruhr Crisis

   • 1923 germany fell behind reperation payments
     • Sep 1923 stresemann becomes chancellor
       • Calls of passive resitstance
       • Hansluther reduces government spending by removing 700,000 public employees
       • Appoints schacht
         • Introduced Rentenmark which is backed by gold
       • Achieves Dawes plan reduces reperations and $200m loan
       • Over next 5 years 25m gold marks invested in economy
     • 150,000 expelled from homes
     • Cuno calls for passive resistance
       • Leads to hyper inflation
         • Workers paid twice a day
         • bread in 1922 -163 marks Nov 1923 - 200b
       • Workers still need to be paid, tax revenue lost, had to import coal, confidence in mark collapsed

3. Historiographies

   • Borchardt
     • Dependance on US loans made it susceptible to world problems
     • wage levels rose faster than production pointed germany towards depression
       • Growth throughout period never stable showing weakness
   • Holtferich
     • Germany's condition only temporary
       • High interest rates should of encouraged investment but population had no faith in savings
         • Growth remained low and job creation was poor

4. How strong was the economy

   • Industry
     • Pros
       • Industry met pre-war levels
       • industry from war gave good basis for after war levels
       • focus on self sufficiency helped
       • dominant electrical industries
     • Cons
       • 1919 production 1/3 of 1913 levels
       • economic reduction 1923 and 1927
       • economy only grew by 4%
       • 3000 cartels reduce competition
   • Agriculture
     • Pros
       • Reich resettlement law 1919 but only helped 3% of people
     • Cons
       • Farmers earn 44% of average wage
       • Loss of labour force (war)
       • Faced cheap imports due to world wide overproduction
       • yields remained low and incomes rose slowly
   • Overall
     • Dependant on US loans
     • economic growth never stable
     • high government spending
     • wage levels increase faster than production levels
     • 1.3 million unmeployed