Germany's Economic Crisis: 1923 Events

Hyperinflation

• Germany experienced a severe hyperinflation in 1923, leading to the decline of the value of the German mark.
• To combat this, the Rentenmark and Reichsbank were introduced in 1923 and 1924, respectively, which helped stabilize the currency.
• Despite the currency recovery, the middle class bore the brunt of the economic hardship caused by hyperinflation.

Invasion of the Ruhr

• France occupied the Ruhr industrial region in 1923 to enforce Germany's payment of reparations.
• Germany responded with passive resistance but eventually resumed production under Stresemann's leadership.
• This decision was met with criticism from some who felt it was a sign of weakness.

Reparations

• The Dawes Plan (1924) aimed to create a more viable reparations payment system based on Germany's capacity.
• This plan involved American loans to Germany to help with its economic recovery and prompted the French withdrawal from the Ruhr.
• The Young Plan (1929) further reduced reparations and extended the repayment period.

Political Stability

• Between 1924 and 1929, the Weimar Republic enjoyed a period of relative political stability.
• Moderate political parties gained widespread support, while extremist groups saw a decline in popularity.
• Figures like Gustav Stresemann and Paul von Hindenburg were trusted leaders during this time.

Stresemann's Achievements and Policies Abroad

• The Locarno Pact (1925) established border agreements between Germany, France, and Belgium, improving international relations and leading to the withdrawal of allied troops from the Rhineland.
• Germany's admittance into the League of Nations in 1926 signaled its reintegration into the international community.

Kellogg-Briand Pact (1928)

• This pact, signed by numerous countries, outlawed war as an instrument of national policy.
• It contributed to a positive image of Germany on the international stage and boosted public trust in Stresemann and the Weimar Republic.

Economic Improvement & Trouble

• Despite economic growth and reduced strikes, Germany's economic recovery was largely dependent on foreign loans.
• High unemployment, particularly during 1926-1927, and struggles faced by farmers and small businesses highlighted the ongoing economic challenges.