The period between 1925 and 1929 was considered golden period in Germany when compared to the years preceding it because many economic and social reforms were brought about by Gustav Stresemann. Gustav Stresemann was born on May 10th 1878 in Berlin. He was a learned scholar and a statesman par excellence. He wrote a few books and essays. In 1926 Gustav Stresemann was awarded Nobel Peace Prize. He was the Chancellor of Germany only for a year in 1923. He was a right winger and worked for the holistic development of the country. His best stint was that of a Foreign Minister from 1924. He served till his death on October 3rd 1929.
Germany after Treaty of Versailles
- Germany had to pay large money as compensation of war.
- People of Germany were spread out in various countries.
- Socialism was becoming popular.
- Mark, the currency of Germany was losing its value in world market and the hyperinflation was creating a lot of problems for the people.
- Hundreds of Marks could not help the people buy even a loaf of bread.
- Racists and extremists of Germany wanted to the country to be run their way.
- There was general discontent among the people as they were bearing the brunt of reparations of the war.
Growth of Gustav Stresemann
Gustav Stresemann was a supporter of the World War I and believed that submarine warfare would bring down the British. He was an honest politician, very hard working and he earned the respect of world leaders. He made use of this goodwill to stabilize the economy of the country. Initially he did not support the Weimar Republic and started his own party called German’s People’s Party. However his ideas changed and advocated a coalition with the SPD headed by Ebert. He wanted to consolidate democracy striking a balance of right and left. He became a chancellor in 1923 and his government lasted for hundred days. After that he took over as the foreign minister and remained so till his death in all the coalition governments of Germany.
Gustav Stresemann’s Role in the Economy of Germany
Gustav Stresemann was very able and had specific plans to improve the economic situation of Germany.
- He abolished Mark, the currency of Germany as it had lost its value.
- All the currencies were burnt.
- He introduced a new currency called Rentenmark.
- He introduced a new national bank called Reichsbank which was given the charge of managing the currencies.
- By limiting the credit and the currency in circulation the inflation was brought under control.
- Dawes Plan was the master stroke of Stresemann.
Charles Dawes was and American banker and the budget director from the US. He had come to Germany in 1923 to curtail the fall of German economy. The German Reichsbank was bettered under the advice of Charles Dawes. Dawes plan initiated by Stresemann was a plan where Germany took credit from this banker to pay up the reparations. The loan could be paid off over a longer period of time. Annual payments were reduced as well. The banker was encouraged to invest in the industrial sector of Germany. This plan naturally kicked off the economy of Germany.
The Young Plan
The Young Plan which was made in 1929 gave further relief to the reparations. The repayment was reduced from 6 Billion to 2 Billion. Germany was also allowed 59 years pay this p. This was a great relief for the people of Germany as the taxes could be reduced and their spending capacity increased. This in turn boosted industrial development and employment chances were on the rise. Several political parties were still incensed and Adolf Hitler said that Germany was passing on the penalty to the unborn children.
The Locarno Pact
As the foreign minister he made commendable inroads into the issues of borders of the state. France, Italy, Germany, Belgium Czechoslovakia and Poland met at Locarno in Switzerland. A number of treaties were signed to settle the dispute amongst themselves. France, Germany and Belgium accepted the borders drawn up in the Treaty of Versailles. It was Stresemann who took the initiative for this pact. Stresemann was a nationalist and he wanted to guard the national interest at all costs. This pact enhanced the image of Germany and France and Britain agreed to talk about German membership in the League of Nations. Stresemann saw this as a victory for Germany as it was now considered at par with other countries. However the people of Germany were not very happy as the border planning was as per the Versailles Treaty and there was no amendment to it. In 1930 Rhineland was completely evacuated, five years ahead of schedule and this was evacuation was mainly due to Stresemann.
Success and Failures
Gustav Stresemann was a great statesman who worked with a vision. As a foreign minister he brought about a sea change in the opinion about Germany. After the war Germany was completely isolated and the Treaty of Versailles was signed without Germany being a part of it. Stresemann’s efforts changed all that and by 1925, Germany was a member of the League of Nations. The German self esteem also improved. The economic situation also improved with the Dawes Plan and Young Plan. Taxes on the people were reduced and this itself was big relief for the people. Investment from America in the industrial sector saw many people getting employment. The border issues were also sorted out.
However, one cannot say all was well in Germany under Stresemann. There was an inherent political instability. The Weimar Republic was a coalition government and each party tried to fulfil their agenda. Decision making was difficult as many parties were involved. Unemployment did reduce but not as expected. Though there were changes in the fortunes of Germany, they relied heavily on the US. This reliance was not very healthy for Germany. As Hitler rightly said the country was passing on the problems of penalty to the generations which were yet to be born.
Germany’s defeat in the World War I and its treatment by other countries after the war was dismal. The people blamed the leadership for this. In the given situation, Stresemann managed to make some changes in the lives of the people of Germany and managed to raise the esteem of the country in the eyes of the world.