Weimar recovery

Home learning focus

Learn about how the Weimar Recovery took place.

This lesson includes:

  • one video about Gustav Stresemann

  • three activities to help with learning

Learn

In 1923, Germany's Weimar Republic was on the verge of collapse socially and economically. However, in a dramatic turnaround the years 1924 to 1929 were a time of relative stability.

During this time the Weimar economy recovered and German cultural life flourished.

Much of the reason for this recovery is due to the role played by Gustav Stresemann, who became Chancellor in August 1923 when Germany was in the middle of a hyperinflation crisis.

Stresemann was only Chancellor for three months, but continued to serve as Foreign Minister until his death in October 1929.

Watch this short film to learn more about Stresemann and the Weimar recovery.

How Stresemann sparked the Weimar recovery

Ending hyperinflation

Stresemann’s outstanding achievement as Chancellor was to end hyperinflation, which he accomplished in just three months.

Stresemann did four key things, he:

  • Called off the ‘passive resistance’ of German workers in the Ruhr, which helped Germany’s economy as goods were back in production. The government could then stop printing money to pay striking workers.

  • Promised to begin reparations payments again. This persuaded France and Belgium to end the occupation of the Ruhr by 1925.

  • Introduced a new currency, the Rentenmark. This meant prices were stabilised as only a limited number of Rentenmarks were printed, so money rose in value. This act helped restore confidence in the German economy both at home and internationally.

  • Reduced the amount of money the government spent so that its budget deficit reduced, although this did mean that 700,000 government employees lost their jobs.

Renegotiation of reparations

The payment of reparations had caused the hyperinflation crisis in the first place, and these payments would have to continue. However, Stresemann had gained Germany the sympathy of the Allies through his decisive actions in the autumn of 1923.

As a result, the Allies allowed Germany to renegotiate payments and there were two new repayment plans, The Dawes Plan and The Young Plan, over the next five years.

The Dawes Plan

Charles Dawes was the US budget director who in 1923 was sent to Europe to sort out Germany's economy.

Under his advice, the German Reichsbank was reformed and old bank notes were called in and burned which ended hyperinflation.

The Dawes plan for reparations was proposed in April 1924, and agreed in September 1924.

Under this plan the amount of reparations to be paid stayed the same overall, at 50 billion Marks, but Germany only had to pay 1 billion Marks per year for the first five years and 2.5 billion marks per year after that.

The period for repayment was indefinite, and 800 million Marks from the USA was made available to Germany as a loan.

The Young Plan

Owen Young was an American industrialist who led the Allied Reparations Committee, which looked at supporting Germany's finances and repayments.

The Young Plan was proposed in August 1929 and agreed in January 1930.

The new repayment plan reduced the total amount of reparations by 20 per cent.

Germany would now pay 2 billion Marks per year, of which two thirds could be postponed each year if necessary.

The period of repayment was to be 59 years, with the payments due to end in 1988.

US banks would continue to loan Germany money, coordinated by one of the world's leading bankers, J P Morgan.

How The Dawes and The Young Plans worked

Was the recovery real?

Historians disagree about the extent to which the Weimar economy really recovered during the years 1924 to 1929.

There were signs of both a recovery but also continued weakness in the economy.

Signs of recovery

  • By 1928 industrial production levels were higher than in 1913 (before World War One).
  • Between 1925 and 1929 exports (sending goods or services abroad) rose by 40 per cent.
  • Hourly wages rose every year from 1924 to 1929 and by 10 per cent in 1928 alone.
  • IG Farben, a German chemical manufacturing company, became the largest industrial company in Europe.
  • Generous pension, health and unemployment insurance schemes were introduced from 1927.

Signs of weakness

  • Agricultural production did not recover to its pre-war levels.
  • Germany spent more on imports than it earned from exports, so the country was losing money every year.
  • Unemployment did not fall below 1.3 million, and in 1929 increased to 1.9 million.
  • German industry became dependent upon loans from the USA.
  • The government ended up spending more than it received in taxes and so continued to run deficits from 1925 onwards.

Practise

There are several activities you can try out to check what you have learned about the Weimar Recovery.

Activity 1

Take this test from SAM Learning to check your knowledge of the measures taken as part of the Weimar recovery.

Select Year 10 - Weimar Recovery

SAM Learning

Activity 2

In this activity from SAM Learning consider how much you think the Weimar Republic recovered economically under Gustav Stresemann.

Select Year 10 -How Far Did the Weimar Republic Recover under Stresemann?

SAM Learning

Activity 3

In this activity from Teachit you can rate the success of actions taken to aid the Weimar recovery.

For this activity you will need four different coloured pens or pencils. Either download and print the worksheet or write your scores on a blank piece of paper.

Teachit History

There's more to learn

Have a look at these other resources from around the BBC and the web.

Bitesize Daily lessons
In Our Time - The Frankfurt School
BBC Teach - Hitler's rise to power