Weimar Economy

Weimar Economy

Impact of the war
1. 1920 inflation 14x higher than 1913
2. Unemployment remained low
  1. encourage us to give loans
3. curreny value fell to 20% of prewar levels
4. Germany relied on treasury bills and war loans
  1. Inflation after the war
    1. debt grew from 5000m to 144,000m marks
5. Treaty of Versailles
  1. Recieved no more reperations from Russia
  2. £6.6b in reperations
  3. France Italy and Belgium receive free coal
  4. Saar given to french
  5. Lost its colonies
Ruhr Crisis
1. 1923 germany fell behind reperation payments
  1. Sep 1923 stresemann becomes chancellor
    1. Calls of passive resitstance
    2. Hansluther reduces government spending by removing 700,000 public employees
    3. Appoints schacht
      1. Introduced Rentenmark which is backed by gold
    4. Achieves Dawes plan reduces reperations and $200m loan
    5. Over next 5 years 25m gold marks invested in economy
  2. 150,000 expelled from homes
  3. Cuno calls for passive resistance
    1. Leads to hyper inflation
      1. Workers paid twice a day
      2. bread in 1922 -163 marks Nov 1923 - 200b
    2. Workers still need to be paid, tax revenue lost, had to import coal, confidence in mark collapsed
Historiographies
1. Borchardt
  1. Dependance on US loans made it susceptible to world problems
  2. wage levels rose faster than production pointed germany towards depression
    1. Growth throughout period never stable showing weakness
2. Holtferich
  1. Germany's condition only temporary
    1. High interest rates should of encouraged investment but population had no faith in savings
      1. Growth remained low and job creation was poor
How strong was the economy
1. Industry
  1. Pros
    1. Industry met pre-war levels
    2. industry from war gave good basis for after war levels
    3. focus on self sufficiency helped
    4. dominant electrical industries
  2. Cons
    1. 1919 production 1/3 of 1913 levels
    2. economic reduction 1923 and 1927
    3. economy only grew by 4%
    4. 3000 cartels reduce competition
2. Agriculture
  1. Pros
    1. Reich resettlement law 1919 but only helped 3% of people
  2. Cons
    1. Farmers earn 44% of average wage
    2. Loss of labour force (war)
    3. Faced cheap imports due to world wide overproduction
    4. yields remained low and incomes rose slowly
3. Overall
  1. Dependant on US loans
  2. economic growth never stable
  3. high government spending
  4. wage levels increase faster than production levels
  5. 1.3 million unmeployed

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	Created by Ted C about 6 years ago