Edexcel IGCSE History: The Recovery of Germany (1924-1929)

This section details Germany’s economic and political recovery during the Weimar Republic’s “Golden Years,” from 1924-1929. The information is particularly relevant for exam components a, b, and c.

I. Economic Stabilization and Recovery

A. The Introduction of the Rentenmark (1923):

• Context: Germany faced catastrophic hyperinflation following World War I. The value of the old German Mark plummeted, leading to widespread economic hardship and social unrest. The price of a loaf of bread, for example, rose from 1 Mark in 1919 to 100,000 Marks by 1923.
• Gustav Stresemann’s Role: Chancellor Gustav Stresemann implemented a crucial reform by introducing the Rentenmark as a replacement currency. This action was a critical turning point in Germany’s economic crisis.
• Effect 1: Halting Hyperinflation: The Rentenmark’s introduction immediately stabilized the economy. Strict control over the printing of new notes prevented the runaway inflation that had characterized the previous years.
• Effect 2: Restoring Confidence: The stabilization fostered renewed confidence in the German economy both domestically and internationally. Foreign nations, previously hesitant to trade with Germany due to the worthless currency, now re-engaged commercially. This led to increased imports and exports, reduced food shortages, and boosted the popularity of the Weimar government. This newfound stability empowered Stresemann to tackle other pressing issues, such as the massive reparations burden imposed by the Treaty of Versailles (132 billion Marks). The Rentenmark was eventually replaced by the more permanent Reichsmark, with the Reichsbank managing the currency supply to ensure further stability.

B. The Dawes Plan (1924):

• International Collaboration: The Dawes Plan represented a significant intervention by the international community, primarily the United States. Charles G. Dawes, an American official, played a central role in negotiating the plan.
• Key Provisions: The plan provided Germany with a substantial loan of $800 million from the US, easing the immediate economic burden. It also significantly reduced Germany’s reparation payments, making them more manageable. Simultaneously, French troops were withdrawn from the Ruhr region, restoring vital coal and iron reserves to Germany.
• Effect 1: Economic Recovery: The infusion of capital, reduced reparations, and the return of industrial resources propelled Germany’s economic recovery. The government had more resources to invest in industry, boosting economic growth and creating jobs.
• Effect 2: Economic Dependence on the US: While beneficial in the short term, the Dawes Plan created a significant dependence on the US economy. This proved disastrous following the Wall Street Crash of 1929, as US banks recalled loans, triggering a cascade of financial problems in Germany, contributing to the Great Depression.

C. The Young Plan (1929):

• Further Reparation Revision: The Young Plan further revised the reparation payments from the Treaty of Versailles, reducing them by 20% and extending the payment period to 59 years.
• Effect 1: Eased Reparations Burden: The revised plan offered further economic relief, enabling the government to reduce taxes and invest more in industry.
• Effect 2: Nationalist Criticism: Despite its economic benefits, the Young Plan faced considerable opposition from right-wing nationalist groups. They viewed it as an acceptance of Germany’s guilt and an ongoing humiliation imposed by the Treaty of Versailles. The plan’s long repayment period was criticized as unfairly burdening future generations. Despite the criticism, the plan was ultimately ratified after a referendum.

II. International Relations and the Weimar Republic

A. The Locarno Treaties (1925):

• Border Stabilization: The Locarno Treaties involved Germany accepting its post-World War I borders as defined by the Treaty of Versailles (e.g., Alsace-Lorraine remaining French). In return, France agreed not to invade the Rhineland, a key German territory.
• Effect 1: Settled Border Uncertainties: This agreement provided a degree of security for both Germany and France, easing tensions and reducing the threat of conflict.
• Effect 2: International Recognition: The treaties signaled a shift in Germany’s international standing, moving towards recognition as a responsible member of the European community.

B. Germany’s Admission to the League of Nations:

• Restoration of Trust: Germany’s admission to the League of Nations (1926), following the Locarno Treaties, marked a significant turning point. It demonstrated a resurgence in international trust in Germany’s willingness to participate in international diplomacy. Stresemann’s involvement in the League Council highlighted Germany’s re-emergence on the world stage.
• Effect 1: Increased International Trust: Germany’s presence in the League facilitated discussions and cooperation between nations, promoting peace and reducing the likelihood of war.
• Effect 2: Restored Domestic Confidence: For German citizens, the nation’s return to the international community restored confidence in the Weimar government. This increased support for moderate political parties, contrasting with the support for extremist groups.

C. The Kellogg-Briand Pact (1928):

• Renunciation of War: The Kellogg-Briand Pact, signed by over 60 nations (including Germany), represented a collective commitment to renounce war as an instrument of national policy.
• Effect 1: Increased International Trust in Germany: Germany’s participation in the pact solidified its improved international standing, further enhancing its credibility as a peace-seeking nation. This positive perception also helped secure further reductions in reparation payments under the Young Plan.
• Effect 2: Enhanced Domestic Confidence in Weimar: The pact reinforced optimism among German citizens about their country’s future and its role in a peaceful international order. This helped maintain support for the Weimar Republic and its moderate parties. However, some opposition remained from those who felt the pact represented continued appeasement of wartime enemies.

III. Conclusion:

The period 1924-1929 marked a period of significant recovery and relative stability for Germany. The economic reforms and international agreements helped restore confidence in the Weimar Republic, both domestically and abroad. However, underlying tensions and challenges remained, which would ultimately contribute to the rise of extremism and the end of the Weimar Republic in the 1930s.