Stresemann Effects

The First World War had a devastating impact on Germany in a variety of ways. Following the end of the conflict and defeat of the Central Powers in 1918, the political instability and decimation of the economy resulted in famine, poverty and the rise of political radicals on both the left and right. ‘The proud German army was defeated. The German people were surviving on turnips and bread’1. Kaiser Wilhelm was forced to abdicate by the Allies, though the damage was irreversible; his Imperial Government had crippled the economy during the war, which was funded by loans rather than taxes. Not only did this put Germany in excessive debt, but lead to inflation, which plagued the nation during the 1920s. The value of money drastically decreased

The absence of men to work in the factories and fields caused great food shortages and decreases in production while the women and children were left without vital sources of income – this meant that the government was forced to spend a third of its entire budget on pensions for the 600,000 war

Widely regarded as the most influential figure of the republic, Stresemann ended hostilities with the French, rescued the economy from hyperinflation and led Germany on the path to recovery. While 'the industrial tycoons, the army and the state were benefitting from the ruin of the currency'11, the results for the masses were catastrophic. Stresemann reformed the nation's economic and foreign policies in order to alleviate the suffering of the people by ending resistance in the late September of 1923 and attempting to persuade French forces to retreat from the Ruhr. This provided opportunities for growth and persuaded the Allies to be more lenient; previously, the French Premier, Raymond Poincaré, had believed that the defaulted payments had been Germany testing their limits, however Stresemann's efforts proved that their defaults had resulted from a lack of means. He introduced a new currency (the Rentenmark), and 'In 1924 Germany agreed the Dawes Plan with the USA, Britain and France'12, however this recovery was fragile, as it 'depended on American loans which could be withdrawn at any time'13. Not only did this mean that the nation's fate now rested with the somewhat volatile model of American capitalism, but also that the recovery was limited - 'Unemployment was a serious problem. The economy might be growing, but it wasn’t creating jobs fast enough'14, however