Weimar Germany was a republic formed in 1919 after World War 1 it was the first democratic experience for German citizens. Weimar Germany ended in 1934 when Hitler becomes chancellor and obtains more power eventually naming himself the Fuhrer. The Wiemar republic had a difficult start between 1919 and 1923 since it suffered hyperinflation, political polarization and reparations were a heavy burdened.
Friedrich Ebert from the Social Democrats party named Gustav Stresemann from the Germans People’s party, chancellor and later named him foreign minister who carried out several policies to solve these problems. This essay will analyze to what extent Stressman achieved political and economic stability.
On one side the Stresemann was successful by introducing the Rentenmark, a new currency, to solve hyperinflation. This new currency was linked to the price of gold; Rentenmarks could be exchanged for one dollar. Inflation was brought under control, and a new period of prosperity in the country that the people called the “Rentenmark miracle”. Therefore Stresemann was able to stabilize the prices of goods and in this way allowed the economy to restart itself.
Secondly, Stressman achieved political stability by introducing Germany’s policy of fulfillment in the 1920s, this was done to prove that Germany was following a new, more acceptable foreign policy to improve Germany’s image so more foreign investments or loans would come to the nation since Germany was thought to be revengeful towards the other nations because of the treaty of Versailles harsh requirements.
The country accepted the loss of Alsace Lorraine, Eupen-Malmedy, and others, it also promised no to send soldiers into the Rhineland. Stresemann even offered to sign a treaty with France and Belgium saying that Germany accepted Territorial changes in Western Europe imposed by the Treaty of Versailles. Hence Stressman achieved political stability by assuring a positive image of Germany to other nations such as France and the United Kingdom, so more investments and loans would come to the country.
Another reason why Stresemann achieved economic stability was the Dawes plan. Stresemann made a financial deal with the United States called the Dawes plan in 1924. This was made to avoid another default crisis like the one of 1923 when Germany could no longer pay their reparations of the war and became in debt, its objective was to restart the economy.
This plan did not reduce Germany’s reparation, but it did allow them more time to pay and the amount would depend on the strength of Germany’s economy. Dawes bank would lend Germany 800 million marks for Germany to pay the reparations and to start a virtuous cycle. This would mean that if there was more money, there would be more investment in the industries, so the industries recovered themselves from the war, so they create more jobs and raise salaries, the workers would buy industrial goods and spend more money, so more taxes are paid, unemployment decreases, and Germany can finally afford to pay the reparations. Consequently, Stresemann achieved economic stability because he guaranteed to pay reparations and restart the economy because of the virtuous cycle.
On a third argument, Stresemann introduced the young plan from 1929 to 1930 to achieve economic stability. Having its name from American banker Owen Young, the Young Plan was a program established by the Allied Reparations Committee and Owen Young, to solve the problem of war reparations on Germany at the end of the First World War, through the Treaty of Versailles since the treaty established 6.6 billion worth of war reparations.
The Young Plan established to reduced reparations by ¾ from 6.6 billion pounds to 1.850 million pounds, the plan also established to give more time to pay and the annual installments were based on the strength of the German economy. Therefore the Young Plan was able to reduce the heavy burden of war reparations, although it was never put into action because of the Great Depression.
Fourthly a Cultural change was created as a consequence of the Young and Dawes plan, since the virtuous cycle began, because of this Germany economy became more modern and very productive and there were great technological financial and economic improvements. This created social changes such as women called `flappers´ who would wear shorter skirts, bobbed their hair, drove smoke and listened to jazz, which gave them a bigger part in society.
Also, the Bauhaus movement was originated that mixed fine art with collage arts and was the origin of today’s arts such as graphic designs. Right-wing Germans saw this as a corruption of German traditional values, because of this they called the new music and art “Degenerate art”.
Therefore Stresemann was able to encourage this cultural change and give a bigger role to music such as jazz, women, films, and art such as the Bauhaus movement, so as to be able to accompany the political changes that were taking place in Germany because of this, Stresemann encourage this more liberal culture since everybody could express their own feelings and artistic ideas and political stability was achieved.
A final argument is the Locarno Treaty: Stresemann achieved political stability and improved Germany´s image abroad significantly. In this treaty eight pacts were signed in Locarno, Switzerland, by Britain, France, Germany, Belgium, and Italy guaranteed peace in all western Europe.
Because of these eight treaties, German foreign soldiers were able to leave the Rhineland, the disarmament commission left after six years of controlling to see it was properly disarmed and that Germany had not broken the Treaty of Versailles. Therefore the results of the Locarno treaty achieved political stability and Gustav Stresemann´s and Germany´s image was greatly improved.
On the other hand, Stresemann was unsuccessful in achieving economic stability since the farmers suffered from falling food prices, therefore they were earning less money. Farmers were ⅓ of the German population, meaning ⅓ of the population was not benefiting from Stresemann’s economic plans, because of this many would later vote for the Nazi party.
This was caused because cheaper food was being imported, now they had to compete with these new food prices which required them to modernize and improve their productivity. For this to happen some farmers decided to ask for loans from the banks to buy new machinery and became in debt. Others did it without machinery and struggled.
The Nazi party made big campaigns using the phrase “Blood and soil” this not only meant the agricultural part of Germany but their blood meaning their race, farmers struggling with their debts, were receptors to anti-semitic Nazis. Therefore Stressman failed to achieve economic stability for farmers which eventually went against the Weimar government.
Secondly, Stressman also failed to achieve economic stability since Germans no longer trusted the banks which resulted in Germans not investing their savings in the banks. If banks had no investments, they could not give loans to Germans who wanted to buy objects or start entrepreneurship because they didn’t have credit. Because of this German banks had asked foreign countries for loans such as the United States of America. But after the wall street crash, the United States bank wanted the loaned money from Germany back.
German banks were not able to do this since they lacked the money because they relied on the money they were lent. Therefore Stresemann failed to achieve economic stability since Germans no longer trusted the banks causing them to ask for loans who became in debt with the United States.
A third reason why Stresemann was unsuccessful in achieving economic stability was that Germany was making more imports than exports. Exports between 1925 to 1929 were around 40% ., but the nation was spending more on imports than what they were earning from exports, so Germany had a fiscal deficit, meaning they were losing money every year.
Germany had to balance their difference in income and spending but wasn’t able to. Consequently, they depended on United States loans, because of this Gustav Stresemann was unable to achieve economic stability.
Fourthly Stresemann had failed to achieve economic and political stability since the wall street crash affected Germany’s economy. The United States of America had made multiple agreements with Germany such as the Dawes and Young plan to help the nation’s economy by starting the virtuous cycle.
Once the stock market crashed in the United States, Americans who had invested in the stock market by asking for loans were affected by this and the great depression started. The United States needed the money that was loaned to Germany. Germany did not have this money, it was either already spend on the reparations or was invested in Germany’s economy and its people.
The nation could either increase the taxes, which would affect the upper classes so the right-wing was against this, or the German government could cut benefits but the left-wing would not accept this. So it was impossible to come to an agreement between the parties since there were equal amounts of votes, therefore the United States could not get their money.
Hence Stresemann had been unsuccessful to achieve economic and political stability considering that the United States was stuck with the great depression and no money which affected Germany and political parties were clashing with one another.
On a fifth argument, Stresemann was unsuccessful in attaining political stability because it was unable to have a coalition. The new German government, Weimar had established a system where political parties had equal representation. This meant that if a party got 15% of the votes, it would get them 15% of the seats in the parliament. Although this system was democratic and had varied representation it couldn’t work.
This created an unstable political system because the parliament ended having small but many political parties, so each one fought for their point of view and would gain at least some votes, this prevented parties from allying to make a bigger party. Therefore a coalition could never be reached in the Reichstag. Hence Stresemann was unsuccessful in achieving political stability since the parties could not achieve a coalition.
In conclusion, Gustav Stresemann was successful in achieving political and economic stability to some extent, but he failed since he did not do a structural change and all the economy was based on United States loans, so once the wall street stock market crashed the German economy crashed with it too.