Germany- Economy till 1923 Flashcards
what problems did the german economy by 1919
i) 16% decline in coal production, 13% decline in arable agriculture, 48% loss of iron ore
ii) cost of reperations (£6600 million in 1921)
iii) growing increase in prices
iv) increase of national debt to 1.4 billion marks in 1919 compared to 5000 million in 1914
what evidence is there that German economy was not performing as poorly as many other European countries?
unemployment rates were extremely low
why didnt the government increase taxes to help pay debt
would risk alienating support for new republic as anti-republican parties would claim money being given to allies
why didnt the government reduce spending to help pay debt
civilians needed payment
why did inflation go unchecked
as the coalition governmetn led by Fehrenbach of the ZP which was supported by many industrialists who benefitted from inflation by taking short term loans to expand business
who became chancellor in 1921
Joseph Wirth
how much of a loan did Germany ask for in Nov. 1922
loan of 500 million gold marks
what did germany do to pay back reparations and what did this cause
print more money, meaning the mark had less and less value leading to hyperinflation
why was Maynard Keynes highly critical of demand for 6.6 billion
said it would damage Allies as well as germany
what are long term causes of Great Inflation
i) by end of 1918 only 16% of war expenditure raised by taxation, 84% borrowed
medium term causes of Great Inflation
adopting policy of ‘deficit financing’ in belief it would:
i) give people more money to spend
ii) overcome problems of demobilising millions of returning troops
iii) cover public cost of public spending on extensive welfare
short term causes of Great inflation
French and Belgian troops took Ruhr
who’s government led policy of ‘passive resistance’ and what was it
Cuno’s gov. It was urging workers to strike and refuse to cooperate with French authorities
who’s coalition government found a response to money in circulation
Stressemann
how many times higher was inflation in 1920 than 1913
14x
How large was the military force that was sent to take the Ruhr
60k men
What % of German coal did the Ruhr account for
85%
By 1923 how many Franco-Belgian troops were in the Ruhr
100k
What was the German response to the Ruhr invasion
Cut all reparation payments and passive resistance
How did the French respond to passive resistance
150k Germans expelled from area and another 132 Germans shot in time of occupation
What were the economic impacts of the occupation of the Ruhr
i) paying workers was drain of gov. resources
ii) tax revenue was lost from the companies
iii) had to pay more to import coal
iv) shortage of goods pushed prices up further
the combined costs of passive resistance was how much compared to cost of reparations
double
how did the price of bread change
Jan 1923- kilo cost 163 marks
October- 9 million
19 November- 233 billion
how did the value of american dollars to one mark change over time
1914= 4.2
15 November 1923= 4.2 billion
who’s aid became government responsibility in 1919
veterans incapable of working due to injury
who were the winners of hyperinflation
black marketers, business people who took out loans, owners of foreign exchange, Hugo Stinnes (able to build 150 newspapers and magazines)
how much of german industry did Stinnes own by end of 1923
20%
in the year 1922, what was the mortality rate in towns with over 100k people
13.4/ thousand inhabitants
