Democracy and Nazism: Germany 1918-1945
Section 2: The ‘Golden Age’ of the Weimar Republic, 1924-28
Economic developments
Social and cultural developments in Germany, 1924-28
Political developments and the working of democracy, 1924-28
Germany’s international position, 1924-28
Practice Exam Questions
‘The “golden age” of Weimar was a myth.’ Assess the validity of this view.
‘Weimar Germany became a more cohesive society between 1924 and 1928’. Assess the
validity of this view.
‘The German economy experienced a remarkable revival between 1924 and 1928’. Assess
the validity of this view.
To what extent did the years 1924-28 represent an era of political stability in Weimar
Germany?
‘By 1928, the Weimar Republic was both economically prosperous and politically stable.’
Assess the validity of this view.
‘The Weimar Republic enjoyed a “golden age” of political stability in the years 1924-1928’.
Assess the validity of this view.
‘Cultural innovation divided Germans in the Weimar era’. Assess the validity of this view.
‘German society during the years of the Weimar Republic, 1919 to 1933, experienced far-
reaching social change.’ Assess the validity of this view.
‘By 1930, the Jews had become fully assimilated into German society.’ Explain why you
agree or disagree with this view.
‘By 1928, Germany had accepted the terms of the Treaty of Versailles.’ Assess the validity
of this view.
‘Weimar democracy never enjoyed the support of the majority of the German people.’
Assess the validity of this view.
‘By 1929, Weimar Germany was a stable democracy.’ Assess the validity of this view.
‘The survival of the Weimar Republic in 1923 and its stability in the years 1923-29 owes
everything to Stresemann.’ Assess the validity of this view.
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,Section 2: The ‘Golden Age’ of the Weimar Republic, 1924-28
Economic developments
In the mid to late 1920s Germany had a stable currency, competitive interest rates and an
increasingly settled place within the international community. As a result it became a magnet for
foreign investment. Between 1924 and 1929 nearly 5 billion dollars was invested in Germany
from abroad, much of it from the US. Fueled by foreign funds, the German economy grew,
though it did so erratically and comparatively slowly. Export performance was also strong: in
1929 exports were 40% higher than they had been in 1925.
The stabilization of the currency
In august 1923, at the height of the hyperinflation crisis, the government of Cuno collapsed and
was replaced by a new coalition led by Gustav Stresemann.
Stresemann’s coalition – the so-called ‘great coalition’ – was the first in the short history
of the Weimar Republic to include parties from both the left and the right.
Stresemann’s own party, the DVP, shared power with the Centre Party, the Socialists and
the DDP.
Stresemann, who was Chancellor for 103 days, took office at a time when the Weimar
Republic was in serious economic and political difficulty.
By the time he left office in November, the currency had been stabilized, inflation had
been brought under control and attempts to overthrow the republic from both the left and
the right had ended in failure.
Stresemann’s priority was to bring inflation under control. This involved 3 key steps.
The end of passive resistance
Passive resistance against the occupation of the Ruhr was called off in September. This was a
highly unpopular and risky move, which led to serious unrest and the attempted Beer Hall Putsch
in Munich. Stresemann calculated, however, that he had no alternative. Germany’s economy was
beginning to grind to a halt and inflation was completely out of control. Ending passive
resistance, which meant that the government stopped paying workers who refused to work for
the French, was an essential first step towards reducing government expenditure.
The issuing of new currency
In November, a currency called the Rentenmark was introduced to replace the old and worthless
Reichsmark. The new currency was exchanged for the old on the basis of one Rentenmark for
one trillion old marks. Since Germany didn’t have sufficient gold reserves to back the new
currency, it was supported by a mortgage on all industrial and agricultural land. Once the new
currency was successfully launched, the government kept tight control over the amount of
money in circulation in order to prevent inflation reappearing. The old inflated marks were
gradually cashed in and, in August 1924, the Rentenmark became the Reichsmark, backed by
the German gold reserve, which had to be maintained at 30% of the value of the Reichsmarks in
circulation. Inflation ceased to be a problem and the value of the new currency was established
at home and abroad. All this happened under the direction of Hjalmar Schacht.
Balancing the budget
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, Stresemann’s government cut expenditure and raised taxes. The salaries of government
employees were cut, some 300,000 civil servants lost their jobs and taxes were raised for both
individuals and companies. As government debt began to fall, confidence was restored.
These changes made a considerable difference to the way that the German economy operated.
Well-managed companies that were run prudently and were careful not to build up expensive
debt continued to prosper. Weaker companies that were heavily reliant of credit crumbled. The
number of companies that went bankrupt in Germany rose from 233 in 1923 to over 6000 in
1924. Moreover, those who had lost their savings in the collapse of the old currency didn’t gain
anything from the introduction of a new currency.
The reparations issue and the Dawes Plan
The stabilization of Germany’s economy was as much dependent on the settling of the
reparations issue as it was on domestic issues.
In November 1923, Stresemann asked the Allies’ Reparations Committee to set up a
committee of financial experts to address Germany’s repayment concerns.
The USA had a vested interest in getting Germany back to a position where reparations
could be made to France, because much of this money was then passed in to the USA to
repay loans. Therefore, the American Banker Charles Dawes acted as the new
committee’s chairman.
By the time the Dawes Plan was finalized in April 1924, Stresemann’s government had
fallen, but he remained as foreign secretary and took credit for much of what was
achieved.
Although the Dawes Plan confirmed the original figure of a total reparations payment of
£6.6 billion, it made the payments more manageable.
It recommended that:
The amount paid each year by Germany should be reduced until 1929, when the situation
would be reappraised. It proposed that Germany should re-start reparations by paying
1000 million marks (a fraction of what it was before) and that this sum should be raised
by annul increments over 5 years by 2500 million marks per year. After this, the sum paid
should be related to German industrial performance.
Germany should receive a large loan of 800 million marks from the USA to help get the
plan started and to allow for heavy investment in German infrastructure.
There was a heated debate in the Reichstag over the Dawes Plan. Stresemann himself didn’t
actually believe in the plan, privately referring to it as ‘no more than an economic armistice’, but
he agreed to it as a way of securing foreign loans. The so-called ‘national opposition’ (mainly the
DNVP, but also smaller right-wing groups like the Nazi movement) bitterly attacked this policy of
compromise, since they believed Germany should defy the unjust Versailles Treaty and refuse to
pay reparations altogether. However, the Dawes Plan was eventually agree and accepted by
both Germany and the Allies in July 1924.
It brought several benefits to Germany:
The allies accepted that Germany’s problems with the payment of reparations were real.
Loans were granted, with which new machinery, factories, houses and jobs could be
provided and the German economy rebuilt.
The French gradually left the Ruhr during 1924-25, once it became clear that Germany
was going to restart paying reparations and the occupation could no longer be justified.
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