The role of Stresemann in solving hyperinflation

  • After Gustav Stresemann became Foreign Minister in 1924, he negotiated the Locarno Treaty with France and Belgium and they agreed on new borders. However, it did not address their borders with countries in Eastern Europe.

  • He then negotiated the Dawes Plan. This plan provided Germany with loans from the US, which Germany could use to pay reparations and invest in its economy. However, one of the problems with the Dawes Plan was that the loans could be recalled at any time, leaving Germany extremely vulnerable.

  • Gustav Stresemann also introduced a new currency called the Rentenmark. This helped to knock off the noughts in the value of money.

  • Stresemann also helped solve hyperinflation by reducing Government Spending. He let unnecessary workers go and reduced the pay of the Government workers who were kept.