1. The Crisis of the Weimar Republic
HST 332: Age of Dictators, Europe

2. The Crisis of the Weimar Republic
Reparations and Hyperinflation
Stabilization
Global Depression

3. Impact of Treaty of Versailles

4. Reparations January 1920 - Treaty comes into force.
January Paris conference sets reparations amount.
May London Ultimatum.
January France and Belgium occupy the Ruhr to exact in-kind payments. German government declares “passive resistance.”

5. Hyperinflation

7. Impact of hyperinflation
Domestic.
Severe economic distortions.
Middle class savings are wiped out.
German exports become more competitive.
International.
Germany couldn’t make payments to Allies.
Allies couldn’t repay war debt to USA.

8. Charles Dawes, 1865-1951 Born Marietta, Ohio; UC law school.
Made fortune in utilities, banking.
Active in GOP.
General with AEF.
1920, first Director of the Budget.
Charles Dawes

9. The Dawes Plan
German budget (taxes and expenditures) is negotiated with the Allies.
Allies appoint a “budget commissioner”.
This official (Owen Young) must OK budget every year.
Germans introduce new, stable, gold-based currency backed by a mortgage on national railroads.
American banks make gold loan to German government.

10. Dawes Plan

11. Gustav Stresemann
Business lobbyist and liberal politician before the Great War.
“Republican from necessity” in 1918, founded liberal German Peoples Party.
Chancellor in 1924, thereafter Foreign Minister.
Policy of “Fulfillment”

12. Stabilization
As long as American loans kept coming, Stresemann and the Republic had a chance to undertake a policy of normalization with the victor powers
Parties that supported the Dawes Plan took a huge electoral hit in general election of 1928
When prices on the New York Stock Exchange collapsed, American banks could no longer make gold loans
When the Depression spread to Germany, it was only a matter of time until the Republic collapsed