Early Years of the Weimar Republic - Economic Chaos Flashcards
What did reparations make difficult?
Made repayment of the huge government debt from the war even more difficult
How was coal a problem caused by reparations?
Germany had lost a large part of its coal reserves due to territory loss but a percentage of reparations had to be payed in coal
How was gold a problem caused by reparations?
Germany’s gold reserves were inadequate for the scale of reparations that had to be made in gold
What did the allies confiscate as a part of the reparations which was a problem for Germany?
Germany’s export fleet, and imposed tariffs on German goods
What did the government chose to do to help pay for the war?
Increase borrowing and print more money
What happens when a government borrows and prints more money?
The government debt grows and the value of the currency falls
Germany’s simple but flawed calculation about WW1
Germany thought they would be able to win the war and would be able to recoup its losses by annexing industrial areas of its defeated enemies
What were the successive Weimar governments reluctant to do after facing a debt of 1.44 billion marks?
Reluctant to reduce spending or raise taxes
What would raising taxes do?
It would risk alienating support for the new republic
How was unchecked inflation somewhat beneficial?
It reduce unemployment as by 1921, unemployment is Germany was 1.8% compared to 17% in Britain
What did unchecked inflation negatively lead to?
It eventually became uncontrollable and by 1923, Germany’s high inflation became hyperinflation
After WW1 what was did an increased number of people require?
Support (injured soldiers)
What did Weimar come a place of as a result of poor conditions?
Revolution
Constitutional Acts in the New Weimar welfare state
1919 - Limited working day act
1922 - National youth welfare act
How did black marketers benefit from the hyperinflation crisis?
They bought up food stocks and sold them at vastly inflated prices
How did pensioners suffer from the hyperinflation crisis?
Their fixed income didn’t keep up with rising prices
How did those who had purchased war bonds suffer from the hyperinflation crisis?
They lost out because the interest payments decreased in value
How did those with debt, mortgages and loans benefit from the hyperinflation crisis?
They could pay off the money owed in worthless currency
How did business people benefit from the hyperinflation crisis?
They took out new loans and repaid them once the currency had devalued further
How did farmers benefit from the hyperinflation crisis?
They coped well since food was in demand and money was less important in rural communities
How did landlords suffer from the hyperinflation crisis?
Those who were reliant on fixed rents were badly hit
How did unskilled workers suffer from the hyperinflation crisis?
Wage increases didn’t keep up with rising prices so standards of living decreased
