Paper 1 : Development of dictatorship : Germany , 1918-1945 : The recovery of Germany, 1924-1929

• Work of Stresemann
• Rentenmark, Dawes and Young plan, US loans, Recovery of German economy

Rentenmark

• Temporary German currency established by Stresemann to tackle the hyperinflation.
• He abolished the old mark.
• This new currency is regulated by the central bank.
• Rentenmark was trusted by the people as they were given insurance that if the Rentenmark failed, the Government promised to exchange them for shares in German industry.
• Results :
• Germany became stable.
• Confidence in German currency was restored.
• By August 1924, Stresemann was able to replace the temporary Rentenmark with a permanent currency called the Reichsmark.
• The Reichsmark would be controlled by the Reichsbank.
• Confidence in currency and banking system rose as number of deposits into the bank increased.
  

Dawes Plan (U.S. Loans) (1924)

• Reparation costs were too high for Germany to pay.
• As a solution, Stresemann and Allies agreed on the Dawes Plan.
• The terms of Dawes Plan:
• Annual payments were reduced to an affordable level.
• American banks agreed to invest 800 million marks in the German industry.
• The effects of Dawes Plan:
• Germany resumed reparation payments
• The French left the Ruhr
• The German economy recovered as decent amount of money was circulating again
• Coal output increased (more resources)
• Sales of manufactured goods doubled.
• Low unemployment rates.
• Extreme political parties were furious as Germany agreed to pay reparations again.
• However, it is a fragile economic recovery as it depended heavily on American loans.

Young Plan (1929)

• Further reduction payments of 6.6 billion to 2 billion.
• Extension of 59 years to pay.
• Effects of the Young Plan:
• Strengthened the Weimar Republic.
• Made Republic seem more trustworthy and stronger
• However, repayments were still high at 50 million per year should be paid by 1988.
  
• Successes of League of Nations, Locarno Treaties, Kellogg-Briand Pact

League of Nations (1926)

• The League of Nations was formed by the Allies in 1919 for world peace.
• Germany was excluded in 1919 as it wasn't a "peaceful" country.
• In 1926, Stresemann persuaded the League of Nations to accept Germany as a member.
• Germany was accepted and sponsored by France.
• Effects :
• Germany was proven to be a respectable member of the international community.
• Germany was trusted and treated as an equal.

Locarno Treaties (1925)

• Agreements between Germany, France, Belgium, Great Britain and Italy
• December 1st, 1925.
• Germany not to send troops into Rhineland.
• Accept that Alsace-Lorraine was permanently a part of France
• Allies agree to remove troops in Rhineland.
• Stresemann proposed that France, Germany and Belgium recognise their borders.
• Discussion of Germany into the League of Nations.
• Germany refused to guarantee its eastern frontiers,
• So, France gave security to Czech and Poland by signing treaties with them.
• Effects of the Locarno Treaties
• Germany to be admitted to the League of Nations.
• Germany was treated as an equal.
• Later on helped Hitler to invade Poland and weaker neighboring countries.

Kellogg- Briand Pact (1927)

• An international agreement signed by 65 countries to not use war to achieve foreign policy aims.
• Effects of Kellogg-Briand Pact
• Shows that Germany is a respectable member of the international community.