The period from 1924 to late 1929 is often described as the ‘Golden Age of Weimar’. It is a time when the Weimar Republic enjoyed greater stability, economic security and prosperity, as well as improved living standards, at least in relation to previous years.
Reasons for recovery
The seeds of this German recovery were planted in the autumn of 1923, with the elevation of Gustav Stresemann to the chancellorship. Stresemann’s finance minister, Hans Luther, formulated a plan to arrest the hyperinflation crisis by introducing a new currency called the Rentenmark. Unlike the old paper mark, the value of the Rentenmark would be fixed to gold prices.
The Weimar government also declared its commitment to meeting reparations payments to the Allies. Germany was able to restore its foreign relations and seek a renegotiation of the reparations figure. The United States-led Dawes Plan was finalised in April 1924 and implemented four months later.
Between 1924 and 1929, the dying German economy was injected with more than $25 billion of foreign money. More than half of this money came from American loans; most of the rest was facilitated by American bankers acting as intermediaries. The American government and US corporations also provided Germany with financial and industrial expertise.
The boom years
This support contributed to a surge in German production during the mid-1920s. New factories were constructed or converted, many using newly developed mechanisation and assembly-line techniques.
The restoration of reparation payments saw France and Belgium end their occupation of the Ruhr and withdraw in mid-1925. This freed up Germany’s industrial resources there and allowed production to return to its full potential, attracting investment and expansion.
From this point, Germany’s recovery was very rapid. Her economic growth after 1924 exceeded that of France and Britain. By 1929, Germany was producing 33 per cent more than before the war. Germany had regained its mantle as the second-highest producing industrial nation after the US.
The economic revival of the mid-1920s enabled the introduction of social reforms and better standards of living.
The Weimar government, then dominated by the Social Democratic Party (SPD) and Centre Party, re-introduced and overhauled the Bismarckian welfare state to provide protection for the young, the aged, the unemployed and disadvantaged. The 1922 Youth Welfare Law, for example, declared that every German child had the “right to education, spiritual, physical and social fitness”.
The government sought to protect these rights by creating new institutions and employing social workers to accommodate children who were illegitimate, homeless, abandoned or at risk.
Further legislation in 1923 and 1927 established relief for those out of work. The Unemployment Insurance Law (1927) required workers and employees to make contributions to a national scheme for unemployment welfare. Other reforms provided benefits and assistance to war veterans, wives and dependents of the war dead, single mothers and the disabled.
Weimar governments also attempted to address a critical shortage of housing in parts of Germany. Article 155 of the Weimar constitution declared the state must “strive to secure healthy housing to all German families, especially those with many children”.
The government honoured this by initiating several visionary programs. It employed architects and planners to devise ways of alleviating housing shortages. Government investment, tax breaks, land grants and low-interest loans were also used to stimulate the building of new houses and apartments.
Between 1924 and 1931, more than two million new homes were built while almost 200,000 more were renovated or expanded. By 1928, homelessness has been reduced by more than 60 per cent.
Workers’ pay and conditions
The prosperity of the mid to late 1920s also benefited German workers. Unemployment was at four per cent in 1924 but the steep increase in industry and manufacturing caused it to steeply decline. By 1929, only 1.4 million out of 65 million Germans were without a job.
The stabilisation of currency and industrial boom also lifted the real value of wages, which increased each year from 1924. In 1927, real wages increased by nine per cent and in 1928 they rose by a further 12 per cent. This made Germany’s industrial workforce the best paid in Europe.
Workplace conditions also improved. Average working hours fell slightly while improved safety and practices produced a drop in workplace deaths and injuries.
The Weimar economic miracle did not benefit everyone. The Mittelstand or middle-class, for example, found little joy in this alleged ‘golden age’.
Stripped of their savings by the hyperinflation of 1923, the middle classes – managers, bureaucrats, bankers, clerks and other professionals – did not enter the ‘Golden Age’ in a position of strength. They also failed to benefit from most of its changes. White-collar workers did not enjoy the wage rises of the industrial sector, nor could they always access the benefits of the Weimar welfare state.
By the late 1920s, wages in the industrial sector had drawn level with those of the middle class – and in some cases they exceeded them. While unemployment fell generally, it remained high amongst white-collar professions. Government documents from April 1928 reveal almost 184,000 middle-class workers seeking employment – and almost half of them did not qualify for unemployment relief from the state.
These conditions fuelled middle-class resentment and suggestions the SPD-dominated government was favouring the working classes over the Mittelstand, once an admired and respected part of German society. Some claimed this was intentional, a subtle form of class warfare to impose “socialism by stealth”.
Unlike the workers, who were represented by the SPD and Communist Party (KPD), the middle classes had no obvious political party to turn to. By the late 1920s, the National Socialists (NSDAP) were able to tap into this middle-class resentment and disenchantment.
German farmers also continued to struggle during the Golden Age. Like the middle-classes, this led many outside the cities and towns throwing their support behind right-wing parties.
Germany’s agricultural sector, devastated by war and government policies, suffered further during a European price slump in 1921. As primary producers selling essential foodstuffs, farmers remained relatively secure during the hyperinflation crisis.
By the mid-1920s, however, German farmers were being confronted with cheaper imported foods. This required them to modernise and improve productivity to remain competitive.
These changes required investment in new technologies, like tractors and other farm machinery. Some farmers borrowed heavily to purchase this equipment; others did without it and struggled. Farmers regularly defaulted on debt payments and farm foreclosures increased markedly.
The ‘farmers’ revenge’
The plight of German farmers worsened due to a global grain surplus and price slump in 1925-26. In 1928, farmers initiated a series of small-scale riots – dubbed the ‘farmers’ revenge’ – in protest against foreclosures and low market prices.
By 1929, German agricultural production was at less than three-quarters of its pre-war levels. The political parties of the far-right attempted to win support from disgruntled farmers by emphasising the importance of agriculture and tapping into traditional values.
The NSDAP, for example, made extensive use of the slogan Blut und Boden (‘Blood and Soil’) and its agrarian, nationalist and racial connotations. Many farmers, struggling with large debts and unsympathetic lenders, were also receptive to anti-Semitic propaganda and conspiracy theories about Jewish bankers and financiers.
A historian’s view:
“The years 1925-28 were the heyday of the Weimar Republic. Prosperity was restored and the parliamentary institutions seemed to be accepted by the majority of the electorate. Indeed, no observer of the political scene in 1928 could have prophesied that five years later Hitler would be in power and parliamentary democracy in ruins. While the Volkisch and National Socialists still polled nearly two million votes in May 1924, by December this was reduced to 900.000, and in May 1928 to 800,000 votes. The voting strength of the communists equally declined, while that of the moderate parties increased.”
1. The years between 1924 and 1929 have become known as the Golden Age of Weimar, marked by economic recovery, growing prosperity and better living conditions.
2. This ‘Golden Age’ was driven by rapid industrial growth in Germany, underpinned by large American loans, capital investment and the restoration of foreign trade.
3. Increased prosperity and a stable currency allowed the Weimar government to introduce ground-breaking social policies, such as housing projects and a welfare system.
4. Industrial and blue-collar workers were the big winners as their wages rose considerably from the mid-1920s. The middle-class, in comparison, saw few benefits.
5. Another disgruntled group during this period were Germany’s farmers, who struggled with difficult market conditions, chiefly low food prices, which led to rising debt and foreclosures.