3. hyperinflation 1923

Question 1

what did Germany rely on during the first world war?

Answer 1

loans to fund their involvement, 75% of war costs had been met by loans

Question 2

How did Germany suffer from inflation?

Answer 2

the governments printed money which lead to an increase in prices and a decrease in the value of the Reichsmark.

Question 3

what happened as a result of the treaty of versailles?

Answer 3

Germany lost imprtant industrial areas such as the Saar coalfields and Alsace and Lorraine, both of which went to France. In turn this led to a loss of 74% Iron ore, 68% of Zinc and 26% of coal

Question 4

On what date did the allies announce the total reparations to be paid by Germany?

Answer 4

In January 1921 the allies announced germany had to pay 6.6 billion in reparations

Question 5

How successfully did Germany their repayments?

Answer 5

Germany managed to scrape together the first installment, then in December 1922 it announced it would not be able to meet the next payment and asked for a break

Question 6

Why did France and Belgium invade the Ruhr in January 1923?

Answer 6

France thought that Germany trying to get out of paying reparations and the French government refused to agree instead they decided to invade the Ruhr, Germany’s industrial heartland with support from members of the belgian army to take what they feel they’re owed

Question 7

how did the Wiemar government react to the invasion?

Answer 7

the government responded by ordering the population of the Ruhr to engage in passive resistance

Question 8

what impact did the governments response have on the German economy?

Answer 8

the governments response made economical problems even worse the richest part of the country was not producing anything , there by reducing the countries income, the government had to start importing the goods that were not being produced, costing more money, the Ruhr workers still had to be paid even through they were not working.

Question 9

How did the Wiemar government respond to the economic problems faced by the German economy?

Answer 9

the governments solution to it’s eeconomical problems was to print more and more mobey and by the Autumn of 1923 Germany was experiencing hyperinflation for example a pair of shoes which in 1913 cost only 12 marks became 1 million marks by the summer of 1923 and 32 billion marks by November 1923

Question 10

explain what is meant by a barter economy?

Answer 10

A barter economy meant exchanging goods or services instead of money e.g. a haircut cost a couple of eggs

Question 11

the five ‘R’s

Answer 11

1. ending passive Resistance
2. Rentenmark
3. Reichsbank
4. Resume
5. Reduce

Question 12

the effects of hyperinflation included..

Answer 12

• workers having to save 6 weeks wages for a pair of shoes
• street car conductors had to collect the fare at the end of the journey, as the value of money changed so rapidly.
• people stole baskets money was carried in rather than the money as it was worth more
• a postage stamp could cost 12 billion marks
• the middle class were ruined and subsequently very bitter towards the weimar republic
• many Germans lost their savings as the currency had become worthless
• those on fixed pensions/incomes suffered as the money they received didn’t increase
• people with debts or mortgages were able to pay of various types of loans (taken out when money was worth much more) cheaply with the deflated currency
• those whose wealth was not in money were unaffected
• many Germans lost their jobs and became homeless
• speculators who had borrowed money to invest benefited
• the lives of many Germans were disrupted. For example, people werepaid twice daily and had to collect their wages in wheelbarrows

Question 13

how did the Weimar government solve the 1923 economic crisis?

Answer 13

in August president Ebert used his powers under Article 48 to form a new government , the new chancellor was Gustav Stresemann. He ended the crisis by

• ordering an end to passive resistance to start the economy working again
• sharply reducing government spending
• agreeing to resume paying reparations, realizing this was the only way to get the French and Belgians out of the Ruhr
• establishing in November 1923 a new national bank called the Reichsbank and introducing a new currency the Rentenmark

Question 14

what impact did the 1923 crisis have on the attitudes of ordinary Germans towards the Weimar republic

Answer 14

the 1923 crisis destroyed the confidence of a significant number of Germans - particularly those in middle class, in the weimar republic