Hyperinflation + Economic Issues Flashcards
what were issues from the reparations?
more difficulty repaying gov debt from the war. not enough gold in reserve for the gold required for repayment. lost coal reserves in territory loss yet had to pay a portion in coal. allies refused trade to protect business. allies took Germany’s export fleet and imposed tariff on German goods
what happened in July 11 1923?
French invasion of Ruhr (occupied until 1925) a large industrial area of Germany
what was the initial economic impact of the war?
Germany printed more money which lead to it being devalued. Gov spending was high to accommodate for war widows, injured vet and demobilised soldiers. by 1923 10% were on fed welfare payments with more on poor relief. the Weimar Constitution made social security a right so they had to support the unemployed
what was the effect of the Treaty of Versailles 1919?
£6,6000 in reparations, must be paid in gold which held value. as mark became weaker reparations became more expensive.
how did the gov respond to the Treaty of Versailles?
printing and borrowing more money made inflation worse. in 1922 attempted to pause payments but were refused. by 1923 Germany failed to pay reparations
what was the French invasion of the Ruhr?
French and Belgian Govs responded to failure by taking the Ruhr a key industrial region and seized raw mats and goods to value of reps
the Govs response to invasion of Ruhr
stopped reps to France and order German workers to follow passive resistance such as strikes. paid workers who strike and compensated owners for lost revenue. had to import stocks of fuel which added to debt, more money printed still to try and meet spending obligations
what was the Hyperinflation Crisis 1923-1924?
mark became worthless. by 1923 cost more to print a bank not than it was worth. people had to Resor to black market and barter by exchanging goods. it affected pensioners, people with savings and those on fixed income. Debtors benefited as they could pay it all off
