Economy WW1 - hyperinflation Flashcards
How much more money was Germany printing?
June 1914 = 6,300 million marks in circulation
December 1918 = 33,000 million marks in circulation
What happened to the value of money?
As there was so much money in circulation, wages, savings and pensions lost their value.
What effect did the land lost due to the Treaty of Versailles have on the economy?
The loss of economical land and agricultural land caused the economy to slow further.
Why did a black market form?
Inflation grew
Lack of goods in legalised stores due to limited imports
Why did the government print more money?
This was done to combat the reparations set by the allies. However this led to more money in circulation which meant the value for money was lost…
What was Social Welfare?
- loans were provided for those who were forced to leave the army in order to help them find work
- pension payments were provided to those who were wounded or orphaned
- government looked after the disabled and veterans
The government actually went into debt in order to pay for these welfare payments.
Why did Germany owe a lot of money as debt?
During the war, the government borrowed a lot of money. By 1918, they owed 150 billion marks.
The treaty of Versailles also meant that the government was under further debt.
What was the reaction to Germany trying to delay their payments?
The allies saw this as Germany trying to avoid payments. France were the most annoyed as their own economy was also struggling and they needed the money.
Until 1924, what were reparations paid in?
By coal, wood and railway carriages
What was the London Ultimatum of 1921?
Germany were behind on their reparations so the Allies said that they must pay it off by 1923 or the Allies could occupy the Ruhr valley in Germany.
What happened to the Ruhr in 1923?
Germany did not complete their reparations and as the London Ultimatum stated, the Occupation of the Ruhr began. The French with the help of Belgium occupied the Ruhr and took control over the German people in that area.
What was the German policy towards the Occupation of the Ruhr?
They began the policy of passive resistance. They paid German workers in the Ruhr to work slower and sabotage French interests by striking.
Why was the Occupation of the Ruhr a problem for Germany?
The Ruhr was an industrial heartland in Germany and was where it’s coal industry was placed. Germany was losing potential money by losing the Ruhr. On top of that they were paying for passive resistance which would have taken a chunk out of the economy.
What caused inflation to become hyperinflation?
The Occupation of the Ruhr
How did the cost of a newspaper changed due to Hyperinflation?
May 1922 = 1 mark
September 1923 = 100,000 marks
November 1923 = 700 billion marks
