Economic crises and government response 1918-23

Question 1

How many marks were there in circulation by 1918?

Answer 1

33,000 million compared to 6300 million in 1914 which caused severe inflation

Question 2

Problems faced by Germany after the war?

Answer 2

• No gold reserves
• Wages and savings lost value and prices shot up
• Loss of both agricultural and industrial land because of ToV slowed the economy

Question 3

Social welfare

Answer 3

• Retraining schemes set up for those who had fought in the war.
• Provided loans to help those leaving the army until they could find work.
• Pension payments for the wounded, widows and orphans
• In 1920 government looked after 3,482,000 veterans with a mixture of lump sum payments and pensions

Question 4

Consequences of Social welfare?

Answer 4

• By 1924 government was still supporting 768,000 disabled veterans , 420k war widows with 1,020,000 children and 190k parents of dead soldiers.
• 10% of population was receiving federal welfare payments and many more on were regional poor relief.
• All these payments from government meant that they had to go into debt to make them.

Question 5

Debt and reparations?

Answer 5

• Government owed 150 billion marks 3x more than before the war
• Huge reparations laid down by ToV
• Initially tried to meet payments and carried on printing and borrow money.

Question 6

Government response to reparations?

Answer 6

• From 1921 on , Germany was entangled in negotiations with the Allies about how much it should and could pay and when.
• The Allies especially France felt that Germany was deliberately trying to avoid payments at all. Argued that German economy had problems but so did other European countries especially France.
• Until 1924 reparations were paid in kind for eg with coal, wood and railway carriages.

Question 7

The Ruhr crisis?

Answer 7

• Jan 1923 Germany failed to deliver its reparation payments in full
• French with the aid of Belgian troops occupied the Ruhr which was vital to the economy because of its coal and the industries based there

Question 8

Government response to the Ruhr crisis?

Answer 8

• Instantly stopped reparation payments to France but not to the other Allies.
• Told all German officials not to accept orders from non-Germans and urged workers in the Ruhr to passive resistance eg working slowly, strikes and sabotage.
• Benefited neither country and in 1923 the new German coalition government called for a stop to passive resistance tactics and began negotiations with the French

Question 9

Hyperinflation crisis?

Answer 9

• Crisis in the Ruhr escalated inflation into hyperinflation.
• Prices were going up several times a day. A newspaper that cost 1 mark on May 1st cost 100,000 marks by 1 September and 700 billion marks by 17 November of that year

Question 10

How did hyperinflation affect the lives of Germans?

Answer 10

• Government cut back on staff , about 750k federal and regional government employees lost their jobs
• Those on fixed payments including social welfare suffered as their payments lost value
• The poor were worst hit and even well of families suffered
• The head of the Von Lingans family had to close the house , sack the servants and move to Berlin to take a job in the offices of a factory