1.3 Economicand Social Problems In Germany 1919-24 Flashcards
How did Germany fund WW1?
-increased borrowing
-printing more money
How did Britain fund WW1
-higher taxes
-government borrowing
What did the German methods of printing money and borrowing money lead to?
-the currency of the mark falling and government debt growing
Why was the German war strategy dependent on?
The fact they would win the war recoup losses by annexing the industrial areas of its defeated enemies and forcing them to pay heavy reparations
-defeat for Germany meant this method couldn’t be utilised and they had to pay reparations as well as deal with the loss of ket industrial areas
What was the debt the Weimar Republic was faced with in 1919?
1.44 billion marks
What are the two ways government debt can be reduced and why didn’t the Weimar Republic do these methods?
- Increases taxes
- Reduce public spending
The Weimar Republic was to politically unstable,
- Risk alienating support and anti-republic parties can claim taxes are being used to pay reparations
- Welfare benefits and civil servants had to be paid as the government was to fragile
When was unemployment really low?
1921
Between 1918 and 1919 prices….
Doubled
Between 1919 and 1920 prices
Quadrupled
Why did the Weimar government allow inflation to increase from 198-1920?
1920 coalition led by Konstantin Fehrenbach was dominated by the centre party who supported many powerful German industrialists (they benefited from inflation by taking short-term loans from the central bank to expand their business)
Why were the reparations not affected by inflation?
They were paid in goods such as gold which remained stable
How did inflation lessen the governments burden of debt?
The payments due were worth less as the value decreases, German politicians allowed it to continue unchecked
What were the unemployment rates in Germany and Britain(shows benefits of inflation)
Britain: 17%
Germany: 1.8%
When did inflation become hyperinflation?
1923
The treaty of Versailles was a key reason for hyperinflation,why?
Germany required to pay reparations but the fixed amount had not been decided
-Reparations commission set up to determine damage caused by German forces in allied countries
-132 billion gold marks paid annual instalments
German government given ultimatum of 6 days to accept -caused political crisis in Germany
What was the reparations commissions job and what was their conclusion?
Reparations commission set up to determine damage caused by German forces in allied countries
-132 billion gold marks paid annual instalments
What did the German cabinet do when faced with the reparations ultimatum in 1921?
Resigned in what they viewed as excessively harsh terms
Who was the chancellor of the new government that replaced the 1920 coalition led by Konstantin Fehrenbach ?
Joseph Wirth
Who was the chancellor of the 1920 coalition?
Konstantin Fehrenbach
What did Joseph Wirth do with the reparations ultimatum?
Accepted it grudgingly (start of the policy of fulfilment)
What was the policy of fulfilment?
Fulfilling the conditions of the treaty of Versailles in the hope that a revised payment would be made by the allies in the future as the current amount was beyond their capacity
What is a piece of evidence that the payments were beyond Germany’s capacity?(3)
The Reparations committee granted a postponement in payments of January and February 1922
-July 1922 Germany ask for further suspension of payments
November 1922 Germany take a loan of 500 million gold marks (realised from obligations for 3/4 years to stabilise currency)
Why did the French and Belgian take over the Ruhr in 1923?
The reparations from Germany had stopped
-attempt to extract payment by force
How did the Burden of reparations make the situation worse?(3)
Made repayment of government debt (build up from the war) much harder
-germanys gold reserves inadequate for the scale of reparations that had to be made In gold
-Germany had lost its coal areas in treaty of Versailles(made coal aspects difficult)
