Germany 1924-1928

Topics: Weimar Republic, World War I reparations, Treaty of Versailles Pages: 3 (949 words) Published: June 19, 2013
Modern Essay

Despite the critical situation in 1923 with the french occupation of the Ruhr, the hyperinflation and the unstable political system, prosperity and stability followed in 1924-1929. This was caused by the success of Gustav Stresemann, the enabling act allowing the introduction of the Rentenmark, the US loans and the policy of fulfilment being instituted. However, Germany was at risk as her economy was founded on short-term foreign investment and a cut off of funds would leave her economy shattered yet again.

The French occupation of the Ruhr, Germany's most important industrial area, had been devastating for Germany as it had rendered her industry relatively broken. Germany had made the first reparations payment in August 1921 but by the end of the year, Germany announced that she was unable to make the next payment's deadline. After a year of negotiation in December 1922, the Reparation Commission declared that Germany was behind in their payments of coal and telegraph poles to France. The next month 60 000 French and Belgian troops marched to Germany and occupied the Ruhr on 11 January 1923.

Germany's hyperinflation exacerbated the problem of fulfilling the terms and conditions of the Treaty of Versailles. Germany had instituted the policy of Passive Resistance where the government would pay the workers in the Ruhr to go on strike and refuse cooperation with the French. This meant that government was printing more money to pay these workers without gaining any money from the industrial sector. Money had to be printed further to meet the reparations payments and also war pensions. The government was also politically unstable, weak and vulnerable to pressure from the left and right but it wasn't prepared to pass the necessary economic reforms as it would add to the suffering of the German citizens. In August 1923 44 trillion marks were in circulation with the presses printing another 46 billion per day. Before the war one US dollar was worth...
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