Foundations were set down in order to rebuild Germany and establish both political and economic stability, through Stresemann’s negotiation and implementation of the Dawes Plan in 1924, to ensure the recovery of the German economy. Under this five-year plan, the Reichsbank (the German National Bank) was reorganised under Allied supervision. Germany received a loan of 800 million gold marks, mainly from the U.S.A which in turn aided economic reconstruction within Germany. The system of reparations payments was altered so that the total was reduced and the period of repayment increased. Germany was to pay one billion marks per annum for the next five years, after which the amount would increase to two and a half billion per annum. Normalisation of diplomatic relations was also improved especially with France, as the Ruhr was to be evacuated by allied troops. However, although the Dawes Plan did seriously improve Germany’s economic standing, the improvements were introduced through the help of the USA and other allies. I therefore don’t believe that the stability was as strong as it could have been, if Germany had improved their economic problems by themselves because, if the USA demanded their money back Germany would be back in a bad state again.
Stresemann’s Rentenmark intervention also helped to stabilise the Germanys economic condition during the ‘Golden Years’. Stresemann and Luther (the Minister of Finance) recalled the old inflated bank notes and replaced the ‘mark’ with the Rentenmark. In the absence of sufficient gold reserves, the new currency was backed by a mortgage on Germany’s agricultural and industrial resources. It was a novel and rather shaky form of security, which relied heavily upon foreign goodwill for its acceptance. Such goodwill and friendliness was forthcoming as a result of Stresemann’s settlement of the Ruhr crisis. This not only allowed for the currency to be stabilised, but also re-opened negotiations on the question of Germany’s reparations payments. The Rentenmark introduction therefore improved the German economy through the encouragement of foreign investment in Germany which in turn led to an increase in new factories, infrastructure, and employment. Similarly to the Dawes Plan, the stability that the Rentenmark provided was very shaky in terms of its security and could easily be removed if relations between the allies took a turn for the worst, due to its heavy reliance on investment and good will from the allies.
The decision to pursue a foreign policy of fulfilment helped to mainly secure foreign affairs but, slightly reduced political stability within Germany due to criticism. The aim of this policy was to convince the Allies of Germany’s willingness to co-operate by fulfilling the terms of the Treaty of Versailles, and by doing so to show how impossible they were for Germany to carry out. Stresemann and his supporters hoped to bring about a mood in which Germany would be able to ask for a revision of the terms of the Versailles Treaty. The idea behind the policy was to return Germany to full sovereignty and independence as quickly as possible. Stresemann’s policy of co-operation and restrained national re-assertion proved successful. Under the Treaty of Locarno in 1925 Germany accepted her borders with Belgium and France, but the definition of her borders in the East were left open for later discussion. Stresemann was however, criticised by the extreme right wing for being too conciliatory with the Allies and for betraying the German national interest. Showing that not everyone was happy with Stresemann’s political decisions and that tension could be starting to build and even leading to a reduction of political stability within Germany.
After the turmoil of 1918-23 it was evident that somebody needed to restore political and economic stability within Germany. To some extent Stresemann achieve this through his political skill and ability resulting in him being one of the most important factors in causing the stability. However, although the policies that he negotiated and introduced were successful in terms of increasing political and economic stability , they seriously lacked security which was a big problem. The Dawes Plan, Rentenmark Introduction and finally the foreign policy of fulfilment all heavily relied on either foreign investment e.g. USA 800 million gold marks from the Dawes Plan or, good will from the Allies themselves in terms of the Rentenmark introduction and treaty of Locarno. So, although stability was secured during 1924-29 if relations worsened between Germany and the allies, this stability could easily almost be instantly removed and result in Germany being no better off than they were before the ‘Golden Years’ of the Weimar. Stresemann didn’t allow this to happen which is why I prioritised him as the most important factor in ensuring the stability stayed secure.
