History: Germany: Topic 4 Flashcards
the weimar economy
How did hyperinflation occur? (5)
1- through the demands for more money after paying the First World War 1 instalment (6.6million)
2- passive resistance
3- through deficit financing (encouraged inflation)
4- the government not being able to pay for war (86% paid through loans or tax)
5- the need to pay for civil servants, those who received welfare benefits etc while on strike.
What was deficit financing?
the maintenance of a call for good
this creates work
overcome the problems of demobilising millions of returning troops
cover the cost of public spending on an extensive welfare state
reduce the real value for national debt.
How were reparations paid?
through gold reserves or assets of a country, money was too unreliable as it could be worthless.
Is inflation good and why?
tiny amounts of inflation as it stimulates a countries economy, starts the process of demands for product which the money is cycled back through to the economy.
What else did hyper-inflation affect?
those who;
1- had lost land under the treaty of versailles (land compensation)
2- wages towards civil servants
3- money towards those who received welfare benefits
When did the French occupy the Ruhr?
11th January 1923
Why did the French occupy the Ruhr?
to demand the years instalment after germanys request to delay paying it.
How much of Germanys coal and steel did the French occupy?
steel - 80%
coal- 71%
What did the government call for normal German people do to?
take part in passive resistance- no one should co-operate with the invaders.
What did civil servants, miners and others do?
went on strike - in which they were financed by the government
What was the result in passive resistance?
140-150 germans dead.
Who encouraged passive resistance?
Cuno
What were the two option for the Weimar government to deal with the countries debt?
1 - raise taxes, cut deficit
2 - ‘deficit financing’, borrow and print more money. this encourages inflation.
How did hyperinflation end?
Strasser employed schacht who introduced the new currency of “retenmark” - only seen as temporary
also set up new national banks called the “reichsbank”.
When was the Retenmark introduced?
15th November 1923
When did hyperinflation end?
November 1923
Who benefitted from hyperinflation?
mortgage holders
entrepreneurs
exporters
those with debt
owners of foreign exchange
property renters with longterm rents
Who did the hyperinflation disadvantage?
those with savings in banks
pensioners who lived off fixed - interest investments
those with war bonds
those on welfare benefits
civil servants
the middle class
landlords receiving fixed rents.
When was the Genoa Economic Conference?
July 1922
Which French government man called for the invasion of the Ruhr?
Poincare
When was the new coalition in government and who was it?
August 1923
Stresemann (replaces Cuno as chancellor)
What does GNP mean?
gross national product - how well a country is doing and the sales of an economy
What does GDP mean?
gross domestic product - the profit of an economy in 1 year
What are ‘real wages’?
confirmed wages when taken into account rising wages/debt.
