How did Stresemann manage the German economy?

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Analyse!

Read the text (left) and analyse the table of government actions (above).

Produce your own table with four columns. Add the four headings to the top of your table: 

  • Policy
  • Details
  • Positive effects
  • Negative effects 

Now make a row for each of the four policies (add these policies under the 'Policy' column):

  • New Currency
  • Loans
  • Reparations
  • Diplomacy

Use the table to record information for each policy.

Evaluate!

Use information you have gathered to answer the question:

How successfully did Stresemann deal with the Germany’s economic difficulties?

International diplomacy

Gustav Stresemann, planned to solve Germany’s economic problems through international diplomacy and investment. He became Chancellor in 1923, supported by the Social Democrats. He wanted to deal with the problem of Germany’s reparations. Over the next five years, in various posts he sought to find answers to Germany’s problems.

Negotiations with the USA led to Charles G. Dawes, an American banker, recommending a plan. Germany would pay less money in reparations every year to make the payments easier. The USA would lend Germany money to help put the country back on her feet.

Stresemann used this plan to stabilise the economy, introducing a new currency based on the value of all German land and assets. This new currency became known as the Rentenmark. By limiting the amount of credit and the amount of money in circulation, the economy was brought under control.

Stresemann’s government did not last long. The Social Democrats withdrew support when Adolf Hitler was given a light sentence for attempting to seize control of the government of the region of Bavaria (known as the Beer Hall Putsch). To learn more about the Beer Hall Putsch click here or here.

Treaty of Locarno

Later, when Stresemann became foreign minister, he attempted to improve relations with France and Belgium. His agreement with them was known as the Treaty of Locarno and it said that Germany, France and Belgium would respect each other’s borders, and that Germany would not send troops into the area bordering France known as the Rhineland.

The treaty was signed in October 1925 and Germany was then allowed into the League of Nations. These steps increased Germany’s international trade.