Rentenmark, Dawes and Young Plan, US loans and the recovery of the German economy

Rentenmark, Dawes and Young Plan, US loans and the recovery of the German economy.

• Rentenmark:

1. The Rentenmark was the new German Mark, introduced by Chancellor Stresemann in November 1923 to replace and abolish the hyperinflated old German Mark.
2. This solved the huge problem of hyperinflation, and the new currency was regulated by the central bank - so confidence in German money was restored.
3. Another reason that the new currency was trusted so much was because if the currency failed, the government promised to exchange them for shares in German land or industry. 

• Dawes and Young Plan:

1. The Dawes Plan was an agreement made in 1924 between the USA and Germany, where the USA planned to lend money to Germany and extend payments - this was because the reparations were so high that it was impossible for Germany to pay them.
2. The Young Plan in 1929 was an extension of this, reducing reparations by 75% (£6.6 billion to £2 billion) and giving Germany 59 years to pay them.
3. The Dawes Plan involved the USA lending money to Germany, who then paid Britain and France back for their reparations, and then Britain and France would pay back debts to the USA - all in one big circle. The German economy was quite fragile as it relied heavily on American loans, but it had recovered and was strengthening.