3. Economic and Social problems 1919-1924

Question 1

When was the hyperinflation crisis?

Answer 1

1923

Question 2

How did the war affect finance?

Answer 2

War required unprecedented levels of government spending. German wartime governments chose to finance the war through increased borrowing + printing money which caused debt to grow and the value of currency to fall

Question 3

What did the wartime government assume?

Answer 3

That they would win the war, and be able to annex industrial areas of defeated enemies and force them to pay reparations

Question 4

What debt did the government of 1919 face?

Answer 4

1.44m marks

Question 5

What would a rise in taxation risk?

Answer 5

Alienating support for the new republic

Question 6

Why couldn’t expenditure be reduced?

Answer 6

Civil servants needed to be paid
Support was so fragile that government avoided making them redundant and even extended welfare benefits

Question 7

True/False: Unemployment was high by 1921

Answer 7

False - Unemployment had virtually disappeared by 1921

Question 8

How extreme was inflation?

Answer 8

1918-1919 - prices double
Quadrupled in 1920

Question 9

How did industrialists benefit from inflation?

Answer 9

By taking out loans and paying them back when the value was much lower

Question 10

How did Germany’s unemployment compare to Britain’s unemployment in 1921?

Answer 10

Germany - 1.8%
Britain - 17%

Question 11

Which cabinet resigned in protest of the reparations?

Answer 11

Fehrenbach - replaced by Wirth

Question 12

Why were the 1922 January and February installments of payments postponed?

Answer 12

Germany’s economic difficulties

Question 13

What did Germany ask for in November 1922?

Answer 13

A loan of 500m gold marks and to be postponed for 3-4 years to stabilise the economy
French were suspicious that this was an excuse and declined

Question 14

What happened in the Ruhr in 1923?

Answer 14

French occupation due to disputes over reparations

Question 15

What was the economic impact of the reparations?

Answer 15

Made war debt more difficult to pay
Germany’s gold reserves were inadequate
Reparations were to be made in coal but they lost their reserved in Versailles

Question 16

How did the government respond to economic issues?

Answer 16

Printing more money

Question 17

How many men did the French and Belgians sent to the Ruhr in January 1923?

Answer 17

60000

Question 18

What was the Ruhr?

Answer 18

Heavily industrial area, generating 85% of coal, many iron and steel works

Question 19

What policy was introduced by Chancellor Cuno?

Answer 19

Passive resistance - no one in the Ruhr was to cooperate with the French
Workers were promised that their wages would continue if they went on strike

Question 20

How did the French react to the policy of Passive Resistance?

Answer 20

Set up military courts and punished mine owners, miners, and civil servants who would not comply
Around 150000 germans expelled
132 shot in 8 months

Question 21

How was the Ruhr affected when the French brought in their own workers?

Answer 21

Output fell to a fifth of what it had been previously

Question 22

What were the economic effects of the occupation of the Ruhr?

Answer 22

Paying wages drained finances
Tax revenue from closed businesses and unemployed lost
Shortage of goods increased prices
The combined cost of all this was twice the reparations payments

Question 23

Effects of the hyperinflation crisis

Answer 23

Prices soared, food ran short, breakdown of law and order

Question 24

How was the welfare system reformed in 1919?

Answer 24

limited working day to 8 hours
state health insurance (previously only for unemployed)
war aid for veterans who couldnt work, war widows and war orphans

Question 25

What did the National Youth Welfare Act set up in 1922?

Answer 25

Youth offices with responsibility for child protection and decreed that all children had the right to education

Question 26

How did welfare reforms affect economy?

Answer 26

Put a huge strain on finance
Printing of money largely to pay out welfare benefits

Question 27

Who benefitted from hyperinflation?

Answer 27

Black marketeers, those with debts/mortgages/loans, new businesses, owners of foreign exchange, farmers

Question 28

Who lost from hyperinflation?

Answer 28

Those who relied on savings, investments, fixed incomes, pensioners, those who lent money to the war effort, landlords, those who did not belong to trade unions

Question 29

How much did short-time working increase?

Answer 29

By 1923 only 29.9% of the workforce was fully employed