The combination of the new currency, improved international relations and, probably most importantly, lots of American loans, the Weimar Republic became much more stable, and even prosperous. People found jobs and had money to buy nice things. There was even a cultural boom, with the Weimar Republic becoming known around the world for its films, its Bauhaus architecture movement and its expressionist artists.

However, Weimar between 1923 and 1929 was a bit of a false paradise. You see, its prosperity depended largely on loans from America. Without them it was sunk. And when America experienced a financial crisis that turned into a depression, the Weimar Republic was back to square one.

Economic Help from Abroad

But we can’t put the Weimar Republic’s recovery down to Stresemann alone. The Weimar Republic was also given crucial economic help to encourage economic growth and make the Versailles repayments easier:

The Dawes Plan, 1924

This was a set of initiatives created by Charles Dawes, an American finance whizz who went over to Germany to sort out its economic problems. The plan set new levels for German debt repayment, made plans for Germany’s central bank, the Reichsbank, to be restructured to make sure it didn’t make the same mistakes that had led to hyperinflation. At the same time, the US Government agreed to help Germany make the reparations payments more easily by providing it with $200 million of loans. This money really helped to get the German economy back on its feet

The Young Plan 1929

This was a replacement for the Dawes Plan that aimed to provide a longer-term solution to Germany’s debt repayments. The plan rejigged things so that Germany would pay smaller sums over a longer period of time; all the way up until 1988, in fact. Really this plan is less significant than the Dawes Plan because of the 1929 Wall Street Crash and its terrible economic consequences, but that doesn’t change the fact that you need to know about it to get your GCSE!