Germany: A Golden Age? Stresemann and the 1920s

Hello and welcome to this episode which is continuing our series on Germany in the first half of the 20th century. Obviously before you listen to this one it's worth while listening to the other ones we've done after the effect of the First World War where we've talked about the Hyperinflation Crisis, we've talked about the Munich Putsch, we've talked about the violence on the streets and so the question is of course always, was Vimard doomed from the start? Why did it not collapse in 1923 and the answer is two words really, why didn't it collapse? Gustav Straseman. That's right, yeah. Gustav Straseman, we've only just discovered how to pronounce properly after teaching it for 20 years. So do you want to tell us a bit about who Gustav Straseman is? Yes, it's been a member of Germany's parliament since 1907 and after Germany's defeat in the war he felt that the only way Germany would be accepted by other European countries was to agree to things up the tree of a sigh and as such you know he's a bit more of an internationalist, he's willing to make deals and work with other countries to get Germany back on its feet. I think that's the key thing, he realizes that the solution to Germany's problems in the 1920s is not at home. No. It's out there in this mess because of what happened during the war and what was done to them afterwards, the solution is getting yourselves re-admitted back to the family of all the indecent nations and getting trade building up again. Yeah and you know it and the time where he does this, I mean he was Chancellor briefly but the work that he does is he does it while he's Germany's foreign minister from 1924 until his death. So everything that we're going to look at in this episode is things that he's done as foreign minister except for the very beginning because we do this in order then. So when Straseman comes in you've got the hyperinflation crisis, you should all remember what this is, this is you know money is worthless, it's will barrels full of cash, it's bread costing millions and billions of miles. And the economy is completely in free fall and it's totally wrecked. The government of Ebert falls and Straseman who is a right-wing nationalist. So that's worth saying I think that he has the support which Ebert never had. That's going to become very obvious later on. Let me get to the end of this when we look out so how much, how far did he succeed? Big part of it is the support of the business and the middle class community. So it is a huge difference. So you walk through the door, you are Gustav Straseman with your shiny bald head and you're piercing blue eyes, he's so pretty. And your problem number one is how do you deal with hyperinflation? And it is surprisingly easy as well. So he just simply stops the old money being printed. They called it in, it was all burned, it was destroyed. And they essentially reset the economy with a new currency called the Renton Mark. And the Renton Mark, it basically was stable, it was linked to gold standard as well. And what that meant was is that hyperinflation just stopped. And then it was eventually replaced by the Reichsmark. So it was a great solution, very simple. Unless you're someone who had a lot of savings. Now this is worth remembering because this is going to feed in to support for the Nazis later. Because people who had their savings, they lost them totally. There was no way to get them back. They'd been totally devalued and they'd gone. If you had property, you were fine. If you owned a business, you were fine. But if you had savings like a good middle class bourgeoisie, you've lost everything. You blame the government, you blame Vimer. And that's, yeah. And it's one of the another part of the anti-democracy, the distrust of democracy that you see as like a constant undercurrent from certain sections in German society. So he's fixed that. And then our hero then goes off to further adventures as the foreign minister. Yeah. And it's got, so in this role, he's mainly job is to get the economy back up and running. And so we'll focus on that. And one of the big issues has been caused by the French and the Belgian invasion of the Ruhr, where they told the workers to go on strike. It's basically what led to the hyperinflation crisis. Now, we know that you solve hyperinflation with the rent and market. They call off the passive resistance in the Ruhr as well. But he has to go to other countries to find a way of getting German industry back on its feet. And he goes to the Americans to the USA. And under the doors plan, America lent Germany 800 million gold marks. And that money was used to restart the economy, to invest in industry and infrastructure. But it was also used to help them restart the reparation payments. The repayment schedule was was jigged around a little bit to make it more manageable for Germany. Well, they take it down from £6.6 billion down to about £1.8 billion. Which is a much more manageable number. And realistic as well. Yeah. And you know, it later on, there was the young plan as well. But the young plan is the young plan. The young plan is 1929. And that reduces the payments still further. But of course, that gets overtaken by events. But everybody always gets the doors plan and the young plan mixed up. The way to remember it is the young plan is younger. The young plan is 1929, whereas the doors plan is 1924. So, what was it, your success? Well, economically. Yeah, well, considering the basket case that the German economy was in 1923, by the time he dies in 1929, it's healthy, except. Except, it's a mental image for you sitting at home listening to the podcast. I want you to picture a huge model of a country. Beautifully designed, made out of gold and jewels and all the rest of it. I want you to imagine that flat model is now balanced on a small pyramid. So, it's on the slightest little, little sunlight point. And that pyramid is made out of, I don't know, matchsticks or something. And those matchsticks are the American loans. Because the German economy is going really well. But it's all dependent on those American loans at the bedrock. It was a high risk strategy. And, you know, with the benefit of high insight, we can say, "Oh, well, that was a bit of a silly mistake." Yeah. But he wasn't to know what was going to happen in 1929. Because, of course, in 1929, after Strazerman has died, the Wall Street crash hits and those German loans are the American loans to Germany are recalled. And that is what has the catastrophic effect on the German economy. Yeah. But again, you don't know that in 1924. So, you know, in summary, if we're looking at how far does Strazerman help the Weimar Republic to recover? Well, in terms of the economy, it looked like it was going well. It was based on American loans. But, you know, for the time, at the time, it appeared to be quite successful. Let me throw a slightly different question at you then. Go on then. Would you say that he helps the economy recover or stabilize? Yeah, it stabilizes a bit of work. Because it doesn't recover. No, it can't do it on its own. It's on life support. Yeah, that's what it is. It's sitting in the hospital on life support with a little machine that goes, "Bing, bing, bing." So, let's talk about the foreign policy then. Because this is, he has to get Germany back up on its feet and accepted as one of the big boys again, yeah? Yeah. So, how does he go about doing that? Well, so, I mean, don't forget that since the end of the First World War, Germany's been kind of shunned, if you like. Yeah. It wasn't allowed to join the League of Nations. Yeah. It's a, it's a pariah. People don't want to really get involved with Germany at this point. But, under Strazerman, he works really hard to improve Germany's relationship through other nations. And there are some key dates and key moments in that. So, in 1925, the Le Cano Pact was signed, involving the British, the French, Belgium in Italy, and amongst that, you know, it was partly non-aggression, but it was also an acceptance of the Western borders. Yeah. And that's the imposed by the Treaty side. And that's the key thing, because now it's Germany saying, "Yes, we agree." Yeah. "We agree to this. They're entering into it. They're on very well." And they're saying, "Yeah, we're ready to play nicely with everybody else. We'll agree with that. We won't do the other bits." And we will not go to war with anybody else. And that has knock-on effect for what happens next, because the following year, in 1926, Germany is allowed to join the League of Nations. You know, they've been banned from joining that. But, under Strazerman, Germany's proved that it can be a trusted nation, and it's going to be sort of rehabilitated into the European family. And that, they get a say in everything that's going on. And then of course, 1928, you've got the Kellogg-Briamp Act, which as it sounds is an agreement with the French. And this is again that we will not go to war with each other. It's that same thing. Yes, what happened in 1914 was a terrible mistake. We're not going to do it again. Because why would we look at the damage it did? To us, no mind anybody else. So, you know, it's in terms of how far was it a success that this sort of foreign policy rehabilitation? Yes, externally, but internally. Yep. The Lachano pact and the Kellogg-Briamp Act, all the other bits and pieces, require you to accept that the territorial land changes of the Treaty of Versailles were fair and a large proportion of the German population. I'm never going to go with that. And so they're blaming Streseman for agreeing to it. And this links, doesn't it? Yeah, straight into what we've talked about with the economic success. There are people in Germany that are just not satisfied with that whatsoever. And it feeds in, again, to this undercurrent of anti-democracy, distrust for the status quo and a desire for a strong man. Yeah. Make Germany great. Yeah. You know, like you say, accepting the Treaty of Versailles was a huge humiliation for so many Germans and for this government to then actually, with the Lachano pact and other agreements, you know, saying, "Okay, we accept it." Yeah. It looks weak, doesn't it? From a right-wing nationalist directive. Domestic, I mean, all politics is local. From an economic and international point of view, what Streseman is doing is absolutely right. But from a, from a domestic politics point of view, if he wasn't a right-wing nationalist politician who already had the support, there's no way he'd have got away with it. No, I'm just about to say, if you can imagine if the socialist tried to do these, it just wouldn't have been accepted. No, not chance. So overall, man, what about the industry and the economy? Yeah. So, you know, we've spoken a bit about solving hyperinflation and getting the the rure back to work and that, you know, this links into the German economy in general. You have to remember that after the war, that the factories, the industry being run down, that there was unemployment, schools, housing, hospitals that all been neglected. And so, what Streseman does is he uses some of the money that they borrowed from the USA under the doors plan to start rebuilding, building these new factories, building the infrastructure, the schools, the roads. And that has a knock-on effect because when you're building, you need more workers, you need the raw materials, you need to get those raw materials from somewhere, so it all stimulates trade. And with this link with America as well, the Americans, some of their big companies are encouraged or, you know, allow to set up shop in Germany as well. And the razor people, Gillette. So, we can say that under Streseman, Germany becomes more prosperous, it becomes a more successful nation. Because let's be honest, the Vimar Germany, 1919 to 23, is a failed state. It's a failed experiment. From 1924 to 1929, it is a successful prosperous country. And people living in it are having a much better life. And in the next episode, we'll talk about the effect that has on culture. But, so here's the 64,000 Rent and Mark question. Has it dealt with the structural problems that are there in Vimar Germany built by the Constitution? So, the answer is no on this, because, you know, if we're going to, we can divide this, can't we can say, was he economically successful? Was he successful in terms of foreign policy? One issue is this political domestic politics. So, you talk about the structure of the Constitution, the way it works. So, you've got so many political parties in Germany. Because of a potential representation. And no single party gets a majority. And, okay, there's no other attempted rebellions against the government while he's in charge. Okay, it's not like the cap puts the muni puts and so on. But, these extremists that they're still there, and they still do have a voice about how small it is. And really, they're just, they're quiet in this, rather than going, they've been got rid of. But even with the extremists still sitting there as well, you've still got the fact that the actual government itself, because it has to be always a government of coalition, is slow and unresponsive, which is fine, while Strasemund's got his hand on the tiller and everything's going along. But if a crisis comes, they cannot react. And we'll see that in 1929. Yeah, because it's that crisis, which really I suppose answers our question. You know, did he recover? Vimer, did he stabilize it? And he just, he stabilized it, didn't he? The recovery was so fragile. Yeah, that when that crash hit, all of the work they put in, yeah, it meant nothing. I mean, we've talked a couple of times before about counterfactuals, counterfactual histories where you say, what if? And here's the thing, Gustav Strasemund dies just before the Wall Street crash. He has a stroke in the summer of 1929. What if he hadn't died? Would he have been able to steer Germany through those first couple of years and just keep a lid on it enough so that you never get that explosion in unemployment and support for the extremists, like the National Socialists? It's an interesting question. I mean, I would add to it and say, would anybody have been able to have kept that fragile democracy going in those circumstances? So do we think the structural problems of the Vimer Constitution are so big that when you get a stress test, when you get a big enough knock that even someone who is phenomenally competent, because let's be honest, he's good. Yeah, and actual government and statesmanship, he's one of the best we've seen since Bismarck. Yeah, I'd agree. He's very, very competent, but I do think personally that the problem caused by the Wall Street crash and when you tie that in with all the underlying resentment that there was from certain sections in German society. Because of course, your farmers, your peasants, your middle class, that although the country's more prosperous and they've not forgiven or forgotten what they lost. It's 23. Yeah, I mean, you can trace it back, can't you? To the defeat, to the first world war. I'm going to say again, what he provided was stability. Yeah, he didn't provide the solution in the long term. Is there a solution in the long term that doesn't require you going back and rewriting that constitution? I don't know. It's one of those perfect storms, isn't it? Well, you're adding problems with the constitution, the economic depression, the unfairness of the Treaty of Versailles. Because it is. Yeah. It's a combination of these events that I don't know. Bismarck himself wouldn't have been out sort of. Yes, he wouldn't. Yes, he wouldn't. He's Otto. He could have fixed it. He'd have shot his gun into the ceiling. He'd have had a bit, a bit of salt in it out. He's Otto of on Bismarck. He can do anything. No, I know what you mean, though. You're right. It's intractable. Yeah. So there you are. That's what Threseman did. That's why you need to know about him. And that's why, ultimately, he wasn't able to save it. He's an ideal essay question. Yes. Perfect essay question. Yeah. How far did Germany recover under Gustav Strasseman? Yeah. So, yeah. Well, thank you very much for listening and good luck with your exams. Don't forget the next episode we'll continue exactly straight on from this where we talk about the changes in Vimer culture that come in this new prosperous view we find ourselves in. So thank you very much for listening. Good luck with your exams.