Economic Challenges 1922-23

Question 1

Why couldn’t Germany pay reparations by 1923?

Answer 1

• spent all gold reserves in WWI
• TofV deprived Germany of wealth-earning areas e.g. coal fields in Silesia

Question 2

What happened in December 1922?

Answer 2

Germany missed payment of coal to French

Question 3

How did the French respond to Germany’s failure to pay?

Answer 3

11th January 1923, 60,000 French and Belgian troops marched into the Ruhr (Germany’s main industrial area), confiscated raw materials and machinery as payment.

Question 4

How did the Weimar Government respond to the French invasion of the Ruhr?

Answer 4

called on citizens of Ruhr to passively resist- went on strike. They sabotaged factories and flooded mines.

Question 5

What happened to resistors in the Ruhr?

Answer 5

arrested obstructors, brought in own men

Question 6

How did the Weimar Government support the strikers?

Answer 6

by printing more money to pay them so that they could afford to keep striking.

Question 7

What was the economic impact of the French occupation of the Ruhr on the German economy?

Answer 7

catastrophic- crippled Germany, contained many factories and 80% of German coal, iron and steel reserves. increased debts, unemployment and worsened shortage of goods.

Question 8

How did the German people respond to the French occupation of the Ruhr?

Answer 8

angry at the Weimar Government for not resisting, couldn’t as French army had 750,000 soldiers compared to Germany’s 100,000

Question 9

Apart from supporting resistors in the Ruhr, why else did the Weimar Government print more money?

Answer 9

needed money to pay off debts, but less taxed collected due to unemployment and failing factories.
1919-23, gov income only 1/4 of required

Question 10

Paper mills and printing shops statistic:

Answer 10

1923- 300 paper mills and 2000 printing shops dedicated to printing more banknotes

Question 11

What were the effects of the government printing more money?

Answer 11

initially made it easier to pay reparations, but also made inflation worse (prices already increased due to shortages).
By 1923 prices reached spectacular heights- hyperinflation

Question 12

Price of bread statistic:

Answer 12

1919- price of bread is 1 mark
1922- 100 marks
1923- 200,000 billion marks

Question 13

Who benefitted from hyperinflation?

Answer 13

• anyone with debt (e.g. loans or mortgages) were able to pay these off easily
• anyone who created raw materials or products, such as farmers, were paid very well for their products
• fixed rents became very cheap
• people who hoarded goods- could sell for a large profit as prices went up

Question 14

Who suffered the most from hyperinflation?

Answer 14

• people on fixed incomes, including people on pensions
• people with savings- the middle classes

Question 15

How did hyperinflation affect trade with other countries?

Answer 15

foreign suppliers began to refuse to be paid in marks, as they became worthless against other currencies - meant essentials were not imported into the country, leading to severe shortages

Question 16

What were the political ramifications of hyperinflation?

Answer 16

• Weimar government shown to be weak: had to use Freikorps to put down Spartacists and workers’ strikes to put down Kapp Putsch, now could not manage the economy
• Hyperinflation caused real damage to almost everybody, most blamed Weimar government. middle classes suffered most- normally the bedrock of the republic
• Extremist parties, with private armies hostile to the government, had gained strength.