- loss of agricultural and industrial land - slowed the economy

- prices - wages - savings - employment

economic challenges 1918-32 Flashcards by Jara Lopez

government spent

all its gold reserves on the war

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December 2018 - ____ marks in circulation

over 33 million

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at the end of the war (printing)

150 printing firms with 2000 printing presses running day and night - to make enough new bank notes

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trade all over Europe affected by war

businesses suffered
people lost their jobs
made worse when war ended: production of war goods eg ammunition ended

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farm production during war

dropped about 20%

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industrial output after war

almost halved

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during war - black market

developed as inflation shot up and good became scarce

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tov

loss of agricultural and industrial land
slowed the economy

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immediately after war

turmoil of strikes
political unrest
changes of government
economy spiralled out of control

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1818 - 1932

period of rising inflation in Germany

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worst period

1923

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during 1918-1923

cost of everything went up with increasing speed

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economy about…

prices
wages
savings
employment

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reasons for 1918-23 crisis

economic downturn
end of war production
soldiers leaving army drove up number of unemployed
many employers (in an effort to stay in business/ to take as much money as possible) reduced wages
wages dropped
value of wages , savings and payments eg pensions also dropped

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what were the crises and how did the gov deal w them: SOCIAL WELFARE

retraining schemes for those who had fought in the war
loans to help those leaving army until they could find work
pension payments for the wounded , widows and orphans
federal Govs and lander provided layers of support
variety of social welfare programs for diff group

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what were the crises and how did the gov deal w them: SOCIAL WELFARE
1920 : ____ disabled veterans

1,537,000 disabled veterans

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what were the crises and how did the gov deal w them: SOCIAL WELFARE
1920 : ____ survivors not classed as disabled

1,945,000

about ___% of the population were receiving _____ _____ ______

about 10% of the population were receiving federal welfare payments

all the payments had to be made by ? and consequences

all payments had to be made by a government (wether federal or regional level) that had to go into debt to make them

debt and reparations - why?

gov had borrowed heavily during war
policy of reparations laid down by TOV

debt and reparations : by 1918 gov owned-

about 150 billion marks ( 3x what it owed in 1914 )

how did the government try to meet payments

carried on borrowing and printing money

what would have happened off the government had tried to change their economic policy (of borrowing and printing money)

would have been unable to make any payments at all

from 1921 on:

Germany entangled w allies about negotiations on how much they should pay and when payments could/should be made

the allies felt... (1921 negotiations)

(esp france) felt that G was deliberately trying to avoid any payments at all - argued that the G economy had problems but so did other E countries , esp france

until 1924

reparations were paid in kind eg with coal , wood and railway carriages

January 1923 (the Ruhr)

Germany failed to deliver its reparation payments in full

( germany reparations - the Ruhr - jan 1923) when it fell behind in 1921:

The London ultimatum of the allies had been that payments should be met or the allies would occupy the Ruhr

why was the Ruhr vital to G economy

because of its coal and industries based there

1923

French occupied the Ruhr with help of Belgian troops

response to the occupation of the Ruhr

- gov instantly stopped all reparation payments ( to france - not other allies) - told all German officials to not accept orders from non germans - urged workers (in Ruhr) to passive resistance

passive resistance

working slowly , strikes , sabotage

how did the French respond to passive resistance

- cut the Ruhr off from rest of G - set up a border patrolled by armed forces - took control of postal and telegraph offices - force - brought in own workers

end of Ruhr occupation

- neither F nor G benefitted - new German coalition gov called for a stop to passive resistance tactics - began negotiations w the French 1923

effect of Ruhr on inflation

escalated inflation --> hyperinflation

Hyperinflation

- prices going up several times a day - people lost their faith in money entirely - increasingly relied on barter and the black marker

price of newspaper : 1 May 1922 vs 1 November 1923

1 May 1922 vs 1 November 1923 1 mark vs 700 billion marks

black market

- used by more and more people - could not supply enough for everyone - prices rose so much that only the rich could afford - those with goods to sell on the black market made huge profits

towns began to use their own

emergency money

crisis at its worst and why

August 1923 - government collapsed

after government collapsed on august 1923

new coalition government , with Gustav stresseman of the DVP as chancellor , benefited from emergency decree

how did Stresseman benefit from the emergency decree

gave his gov powers that included postponing Reichstag meetings and governing by decree if necessary - avoid decision making in reichstag - gov could act more rapidly and decisively than any coalition in the past