home | 1901-WW2 Index


previous | next

Recovery and European Reconciliation

Chancellor Stresemann moved against inflation. He set limits on spending and banned emergency currencies issued by local governments. New money called the Rentenmark was established backed by a mortgage on real estate and industrial equipment. The adequacy of this backing was questioned. But however unredeemable, what mattered was the nation accepting their currency, and ordinary Germans were willing so long as it provided them with purchasing power. The new currency worked. And, to help stabilize its money, Germany pegged its value to the U.S. dollar. But conflict was the nature of politics regarding the economy and money, and a lot of unhappiness remained.

Included in the limits on spending was the end of payments to the unemployed. Some Social Democrats were hostile to the new money policy, believing that it favored the rich, and they abandoned their alliance with Stresemann. Also hostile were bankers, industrialists and Stock Exchange speculators. And with stabilization of Germany's currency came a rise in the cost of labor. Unemployment quickly rose to 1,500,000. Stresemann's government fell in December 1923. Another centrist government was formed, and Stresemann remained in the new government as foreign minister.

A question of Reconciliation and Economic Recovery

Stresemann urged reconciliation and cooperation with France. Despite hostile opinion among his fellow Germans, he announced to the international community his government's willingness to obey Germany's obligations as stated in the Versailles Treaty. Aware of France's fear of Germany, he announced the intention of his government to meet as far as possible France's concern over its military security. He spoke of Europe's economic interdependence and of Germany's need for a step by step move toward regaining its independence and freedom of action within the European community.

Stresemann's policy of moderation and conciliation worked. The British recognized that Germany's economic recovery was in their interest, and they wanted to help Germany. Economic recovery in the world was stimulating a greater desire for international amity among other men of influence. Both Britain and Italy had become disenchanted with France's intransigence. Mussolini's thoughts strayed from amity and drifted to his wondering about a war against France. He was interested in Italy recovering Tunis and Corsica, and he was exploring the possibility of an alliance with Germany.

An international commission chaired by a Chicago banker, Charles G. Dawes, was named to re-examine the problem of Germany's reparation payments (mentioned earlier concerning British history). Dawes had been chief of supply procurement for the American Expeditionary Force during World War I, and he was popular among the French. The French were also looking forward to a sustainable economic recovery in Germany, and they designed a flexible plan that would spread Germany's reparation payments across many years based on Germany's ability to pay, with no payment required for the plan's first year. France received assurances of payment in the form of mortgages on German railroads and heavy industries, and an agreement was made that Germany would re-establish control over its border customs and its railroads in the Ruhr. John Maynard Keynes of Britain and many others liked the plan, while many Frenchmen believed their government was too lenient with the Germans.

The Dawes plan went into effect in September 1924, and France began withdrawing from its occupation of Germany's Ruhr and returning to Germany its normal communications and transport connections. In December, elections in Germany brought a drop in parliament seats held by Communists and Nazis. The Communists, whose seats had increased from four to sixty-five during the crises of 1923, dropped to 45. Seats for the Nazis fell from 32 to 14. The moderate Social Democrats also lost seats, which dropped from 130 to 103. Germany's rightist Nationalist Party were the winners, increasing their seats to 131 and becoming the largest party in Germany's parliament – the Reichstag. The centrist parties held fewer seats, but they remained well represented.

Early in 1925 President Ebert died, and the rightwing Nationalist Party urged Hindenburg to run for the presidency, hoping they would benefit from his popularity. For many Germans Hindenburg was still a national hero, and the conservatism of most German voters resulted in his being elected. It was another turning point for Germany, and for the world – another mistake. Hindenburg took office as president in May, repeating what he had told voters during the campaign: swearing to devote all his strength to the well-being of the German people, to protect them from harm, to maintain the Constitution and laws, and to conscientiously fulfill his duty and be just to all, "So help me God." The election of Hindenburg was received calmly in Britain, but the French were agitated, many of them seeing Germany as having displayed its warlike instincts. And French newspapers continued to describe Germany as unregenerate and as plotting day by day to avenge their defeat in the war.

Avoiding another war was an issue for many in Britain as well as for the French. In Britain, Winston Churchill was complaining that sooner or later Germany would re-arm and that France might want to war against Germany to prevent this. Churchill argued that Britain should not put itself in the position of having to support France in another war against Germany. Britain, he said, should tell the French that the more they are friends with Germany the more Britain will be a friend of France. Churchill appeared to believe that a prosperous and contented German nation was less of a danger to the world, but in 1925 he also observed danger in Germany. He wrote that Germany was united by "an intense hatred of France." He recognized Germany's greater military potential vis-à-vis France, and he spoke of "enormous contingents of German youth growing to military manhood year by year … inspired by the fiercest sentiments."

In the interest of maintaining peace, Britain, Belgium, France, Italy, Germany, Poland and Czechoslovakia met at Locarno, in Switzerland. The foreign ministers – including Stresemann – established good personal relations. Mussolini played the role of a responsible statesman. The ministers put the World War behind them, never using the words "allies" or "enemies." They were attempting the reconciliation that should have been made at Paris in 1919. Stresemann was eager to see France satisfied regarding its security, knowing that this would help Germany win what it could in the evacuation of the French from the Rhineland. And France agreed to evacuate the Rhineland by the first weeks of 1926. Germany, in turn, agreed to leave the Rhineland demilitarized. The participants at Locarno agreed to respect one-another's borders – borders of the Versailles Treaty in 1919. They agreed to cooperate against any aggressor to whatever extent geography and military capabilities allowed. They agreed that disputes that could not be solved by negotiations were to be submitted for arbitration to the League of Nations. And it was agreed that Germany would enter the League of Nations.

The Pact of Locarno was received with skepticism by many in France. And in the Soviet Union it was viewed with hostility. Stalin believed that Germany was abandoning its agreement with them made a Rapallo for the purpose of isolating the Soviet Union.

Briand and Stresemann

France's Foreign Minister Briand (left) and Germany's Chancellor Stresemann

Stresemann returned home to Germany and found public hostility. Many saw conciliation while Germany was still obliged to make reparations payments and still had Allied troops on its soil as weakness – to say nothing about German territory having been torn away. German rightists denounced Stresemann for having given away Alsace and Lorraine and other borderlands – matters that had not been in contention at Locarno. The Nationalists, who had been part of a coalition government, withdrew from that government. Ludendorff denounced the Locarno get-together as a "shame and dishonor." Communists opposed Locarno, believing it would put Germany into a camp opposed to the Soviet Union. Hindenburg had no enthusiasm for it. Stresemann argued that the pact would keep France and Britain from uniting against Germany, and despite all of the opposition he managed to obtain the Reichstag's ratification of the Locarno agreement.

In January 1926, Germany applied officially for membership in the League of Nations. In September, Stresemann gave his maiden address before the League. And that same year – 1926 – he became the first German to win the Nobel Peace Prize, which he shared with France's foreign minister, Aristide Briand.


Copyright © 1998-2014 by Frank E. Smitha. All rights reserved.