The main reason for Germany managing to stabilise herself was Gustav Stresemann. Stresemann became chancellor briefly in September 1923 and remained Foreign Minister until his death in October 1929. Stresemann came to power during the German economic crisis of 1923. He aimed to relieve Germany of the turmoil, which she was in at this time. The economic crisis of 1923 meant that the government was weak. Weak leadership led to the German people having problems, which could not be solved.
People began to protest and demonstrate against the government.The Treaty of Versailles also gave many problems, which the government could not solve. He began his aim by solving the problem of Hyperinflation. He did this by recalling all the old inflated banknotes and destroying them. He created a new currency, called the Retenmark.
As the German people saw that Hyperinflation was being defeated, they gained trust in money again. To recover industry, however, the economy needed more money. They received this in the form of loans from abroad and from the United States of America in the form of investment.As a result of this, more goods were produced and exports rose. This meant that the labour force had to be increased and therefore unemployment dropped. There was still the problem of all German money going towards paying the War reparations.
Stresemann negotiated the Dawes Plan in 1924. The Dawes Plan was an agreement between Germany, the U. S. A.
, Britain and France. It aimed to avoid a crisis over reparations like the one in 1923. It reorganised the reparation payments into stages that Germany would only pay if she could. Stresemann called off passive resistance in the Ruhr.Since Germany had begun to pay her reparations again, the French and Belgian troops had no real reason to stay in the Ruhr, so began to withdraw. Germany also signed the Locarno pact with France, Belgium, Britain and Italy.
The pact was an agreement that the countries keep the existing borders between Germany, France and Belgium. At this Locarno Pact agreement, Germany was involved in the negotiations as an equal to the other countries. This was a great success, showing that Germany had managed to remove some of the bitterness left over from the War.It was made even clearer that Germany was successful in removing the bitterness left from the war when in 1926 Germany was given a permanent seat on the council of the League of Nations. Even though Germany had had all of these successes, she was still not completely stable.
Germany had become dangerously dependant on the American boom of the 1920’s, through loans and trade. If America was to have any future financial problems, which it did with the economic depression of 1929, then Germany would also be badly affected by it.As much as it seemed that Germany had removed bitterness between foreign countries, she still had not. Although they had agreed with Stresemann’s plans and pacts, they had still not been won over. Even though the German people were relatively stable and did not need to support extremist parties, some still agreed with their ideas, so still supported them. The Munich Putsch seemed to be a problem for Hitler and the Nazis but was not completely. Although Stresemann managed to overcome the problem in the short term, he made it worse in the long term because he enabled Hitler to produce plans, which were more likely to work.
Extreme parties like the Nazis opposed Stresemann. They had Storm Troopers that encouraged support for the Nazis. If you did not support the Nazis, the Storm Troopers would beat you up and damage your property.
Even though the political situation had been partially stabilised, it was on the surface only. Stresemann needed to conquer a lot more problems, especially the problem of opposition extremist parties, before the political situation was safely stabilised and there was no longer a threat of revolts, uprisings etc.