by James Elliot

Created on: June 15, 2009

Gustav Stresemann became Chancellor of Germany in 1923, and actually only held the position from August to November, but in that time he made a great difference to the struggling Weimar Republic. When he took the post of Chancellor, Stresemann became the leader of a country wrought with problems, all incredibly serious. The previous leader, Ebert, had had little success in bringing about helpful changes. The Weimar Coalition was a very weak government, and so had much difficulty dealing with the dilemmas it faced. There was constantly political threat to the Weimar Coalition, whether from the communist on the left, or the right wing supporters who had like the powerful rule of the Kaiser. The Treaty of Versailles, which had been made after Germany's defeat in the First World War, was causing a lot of the problems, both economic and political. The Treaty and taken ten percent of Germany's land, all of it's overseas colonies, much of it's coal and iron industry and even some of it's workers. Germany were also forced to pay reparations and were forced to reduce the size of their army, an element which did much to upset those right-wingers who had loved the powerful, Kaiser-ruled Germany.

The huge problem which Stresemann had to deal with was the ensuing economic disaster in Germany at the time. The Treaty of Versailles had completely destabilised the German economy. The reparations that Germany were forced to pay took away about two percent of Germany's output. When the German politicians had protested that this was an intolerable strain on their already weakened economy, they were ignored. When Germany failed to pay their second annual installment, the French legally invaded the Ruhr and began to take raw materials. When the German workers went on strike, the halt in German industry caused the collapse of Germany's currency.Because the Weimar government had no goods to trade, they just printed more money to pay off their war debts. But there was so much money in circulation that prices and wages shot up and money soon became worthless. Germany was in a very bad state.

It was clear to all, both inside and outside Germany, that urgent action was required. In August 1923 a new government under Stresemann took over. Stresemann tackled the problems head on. He called in all the worthless marks and had them burned. He replaced them with a new currency, the Rentenmark. He also negotiated the Dawes Plan with America, which meant that the reparations were paid over

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