economic challenges 1918-32 Flashcards
government spent
all its gold reserves on the war
December 2018 - ____ marks in circulation
over 33 million
at the end of the war (printing)
150 printing firms with 2000 printing presses running day and night - to make enough new bank notes
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
farm production during war
dropped about 20%
industrial output after war
almost halved
during war - black market
developed as inflation shot up and good became scarce
tov
- loss of agricultural and industrial land
- slowed the economy
immediately after war
- turmoil of strikes
- political unrest
- changes of government
- economy spiralled out of control
1818 - 1932
period of rising inflation in Germany
worst period
1923
during 1918-1923
cost of everything went up with increasing speed
economy about…
- prices
- wages
- savings
- employment
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
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
what were the crises and how did the gov deal w them: SOCIAL WELFARE
1920 : ____ disabled veterans
1,537,000 disabled veterans
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
