Recovery, 1924–29

Gustav Stresemann was Chancellor for a few months in 1923, then Foreign Minister until his death in 1929.

As Chancellor, he called off passive resistance in the Ruhr, and brought in a new currency, the Rentenmark, in November 1923. This ended hyperinflation and restored confidence in German money.

Significance: Stresemann's work began the period of recovery known as the 'Golden Years'.

• The Dawes Plan (1924): reparations payments were spread over a longer time, and the USA lent Germany money to help its industry recover.
• American loans and investment poured into Germany in the following years.
• The Young Plan (1929): reduced the total reparations, and gave Germany longer to pay.

Consequences: industry recovered, unemployment fell, and many new factories, roads and homes were built.

• The Locarno Pact (1925): Germany, France and Belgium agreed to accept their borders in the west. Germany was treated as an equal again.
• The League of Nations (1926): Germany was allowed to join, and given a permanent seat on its Council, as one of the great powers.

Significance: Germany was accepted as a respected nation again, and Stresemann won the Nobel Peace Prize. This also made the Weimar government more popular at home.

Recovery: the currency was stable, the economy grew, Germany was accepted abroad, and extreme parties won fewer votes. In 1928 the Nazis won only 12 seats.

Limits:

• The recovery depended on American loans. If the USA ever asked for them back, the German economy could collapse.
• Many farmers were still struggling, and unemployment never fell very low.
• Reparations still had to be paid.
• Extremist parties had not gone away, and many Germans still did not support democracy.

Judgement: Germany recovered, but on weak foundations.