Economic problems 1918-1923 Flashcards
What was the economic impact of World War One on Germany?
- Food shortages
- Inflation
What had happened to the value of the mark between 1913-18?
Had declined by 75%
What were the economic terms of the Treaty of Versailles?
132 billion gold marks to be paid in reparations.
Why was there inflation after the war?
Germany had financed much of the cost of the war by printing more money.
Why did government spending remain high after the war?
They had to support war widows, injured veterans and demobilised soldiers.
What percentage of the German population were receiving federal welfare payments by 1924?
10%
Why did the government had to support the unemployed?
Because the constitution had made social security a constitutional right.
What did reparations have to be paid in?
Gold, which held its value against the declining mark. As the value of the mark became weaker, paying for reparations became ever more expensive.
How did the Weimar Government first try to pay off reparations?
By borrowing and printing more money which make inflation even worse and the value of the mark decline further.
What did the government seek to do in 1922?
Pause reparation payments but they were refused permission.
By early 1923 what had the government failed to do?
Pay its reparations.
How did the French and Belgian governments respond to German failure to pay reparations?
They ordered an invasion of the Ruhr, a key German industrial region.
What did the French and Belgian armies seize in the Ruhr?
Raw materials and goods to the value of the reparations.
How did the Weimar government respond to the invasion of the Ruhr?
They stopped all reparation payments to France and ordered all German workers and business owners to follow a policy of passive resistance (working slowly, strikes, sabotage). They paid the workers who went on strike and compensated owners for lost revenue.
How did the government response to the invasion of the Ruhr worsen the economic situation?
- They had to compensate workers and business owners.
- They had to import necessary stocks of fuel which added to debt.
- To meet spending obligations, the government printed more and more money.
