The Extent On Which Stability And Prosperity In Essay Example

Stresemann's belief was that the Dawes Plan being introduced to Germany would create a time of "quiet and peaceful development" with a monetary aid infusion. This aid would have undoubtedly stabilized Germany, resulting in employment increases through swimming pool and housing construction. Due to gradual poverty following the war, significant amounts were dedicated to improving the country's welfare and as a result, the increase in employment opportunities acted as a catalyst for overall growth. The chance for German industry to re-build itself emerged, productivity increased, and the country could export and generate revenue.

Germany made reparations payments whenever possible. If funds were lacking in one month, they would repay more the next month. The sudden influx of money caused wages to increase by a third between 1914 and 1925, reaching an all-time high four years later, surpassing pre-World War II numbers seen in 1936. This increase led to fewer strikes, dropping from 4755 in 1922 to only 351 in 1926. Companies formed cartels by merging together to obtain a larger share of the market and buying out smaller companies to reduce competition. The stable welfare state provided relief for the poor, creating a "feel-good" factor and reducing political involvement.

The economy benefited from a decrease in conflicts between workers and employers, resulting in increased revenue. The Young Plan, administered by Owen D. Young, Chair of American General Electric Company and Dawes committee member, provided Germany with another loan from the US.

The Dawes committee concluded that Germany should have increased flexibility in her reparation payments. To achieve this, considerable sums had to be invested in the German economy. The payments to the allied forces grew from

1700 million marks to 2400 million marks and would then continue to decrease until they were fully paid off. Like the Dawes Plan, the Young Plan provided stability for Germany and allowed for financial reorganization which strengthened the German economy and allowed it to expand and improve.

After Young and Dawes initiated loans, employment and wages increased, improving the previously horrific economic conditions before 1924. Some argue that foreign loans contributed to government stability. By 1925, unemployment was under 5% of the labor force and wages were consistently increasing as the economy grew. This realization led to fewer people joining extreme right and left political groups, indicating that the Weimar Government was benefitting the nation.

Despite the increased support for anti-Republican parties like the KDP and DNVP during the May 1924 elections, pro-Weimar parties maintained moderate success throughout the decade. However, there were other factors potentially responsible for stabilizing the German economy and government. It is pertinent to consider if these factors were reliant on foreign loans. For instance, the German Welfare State demonstrated that the economy was robust enough to support millions of unemployed citizens, yet it remains unclear how much of this funding came from foreign loans. Regardless, the Weimar government established the "Welfare State" due to the then-existing economic stability. Gustav Stresemann played a significant role in further stabilizing Germany during this period.

During the time Gustav Stresemann held the position of foreign minister (having been appointed in 1923, and previously serving as Chancellor until losing the Reichstag's confidence in November of that year), his role was crucial in bringing economic stability - and to a certain extent, political stability - to the Weimar

Republic. Stresemann's ability to revise the Treaty of Versailles by removing reparations served to diminish public disillusionment with the Republic for having accepted the terms of the Treaty. Furthermore, this revision presented an opportunity for the Republic to stabilize itself, rebuild the nation, and ultimately bring power and success to Germany. One of Stresemann's earliest contributions as foreign minister was ending Passive Resistance. This approach was causing significant difficulties for Germany in 1923, as they struggled to manage both unemployment amongst German workers and reparations payments whilst their economy was in decline. By ending Passive Resistance, Stresemann enabled workers to return to work, reigniting the economy. The German Government no longer needed to print money to pay for unemployed workers, which had led to severe inflation and revealed that the economy was in serious need of support.

Following hyperinflation, Schachts established a new currency known as the rentenmark, which temporarily stabilised the economy. Some argue that without Stresemann's success as foreign Minister, loans such as the Dawes plan and foreign financial backing may not have contributed to Germany's industrial success. Additionally, the implementation of the Cartel system played a significant role. This system involved creating a central retail organisation that allowed each member to produce a specific amount of goods. Prices were fixed at a consistent level in Germany to establish an efficient market and consumer interest. The result was a 2% increase in production between 1928-1929 and facilitated Germany's transition to stability from volatility.

Despite my previous writing about Germany's stability and prosperity between 1925-1939, historians have contested this notion. They argue that the economy was not truly stable, and that foreign loans only served to

hide the country's vulnerability and susceptibility to economic downturns. Coalition Governments contributed to this instability, as the inability of different parties to agree on domestic and foreign policies hindered long-term decision-making. Furthermore, with seven Governments serving between 1924-1930, none were in power for longer than a year. Moderate political groups also failed to fully participate in a parliamentary democratic government.

The Centre party, which leans slightly to the right, and the SPD, who sought a working-class revolution within a parliamentary democracy, both struggled amidst the revival of the German economy. This economic growth was established on unstable foundations, creating a false depiction of prosperity. Germany relied heavily on foreign loans and this became evident in 1929 when America demanded repayment following the Wall Street Crash. Despite appearances of stability and prosperity, there were still sectors facing recession such as agriculture and trade balance. Stresemann and Puekett agreed that Germany was "dancing on a volcano" and experiencing "deceptive stability," as it appeared stable and prosperous from the outside, but in reality was filled with apprehension.