Reparations & Economic Problems Flashcards
When was Germany handed the reparations bill?
1921
What was to original sum of money Germany had to pay for reparations?
£6,600 million
In terms of reparations payments what happened in 1921?
Germany fell behind in payments and the London Ultimatum of Allies stated that payments must be met or the allies would occupy the Ruhr
Treaty of Rapallo
Signes 16th of April 1922
Germany + USSR to renounce all territorial and financial claims, opening friendly relations
How did the Treaty of Rapallo look to other countries?
-mainly afraid of Soviet Russia and the Bolsheviks (especially after the allies’ intervention in the Russian civil war) so Germany looked quite dodgy
—> Germany signed because she finally found an ally
In terms of reparations payments what happened in July 1922?
Germany tried to suspend reparations
—> met by a firm no from the allies (especially France)
In terms of reparations payments what happened in Jan 1923?
Germany had been behind on payments of money and goods by the end of 1922
Jan 1923 Germany failed to deliver payments in full
—> 11th Jan French and Belgian troops occupy the Ruhr
Why do French troops directly the Ruhr?
So that they can secure payment of coal and export goods directly to France
How did the German government respond to the occupation of the Ruhr?
- stopped all reparation payments to France (but not other allies)
- ordered workers to passively resist (strike, work slowly, sabotage)
- told German officials not to accept orders from non-Germans
How did the French respond to Germany’s response to the occupation of the Ruhr?
-set up a border patrolled by armed forces
-took control of postal and telegraph services
—> to cut off the Ruhr from the rest of Germany
-arrested coal miners and brought over French workers instead
When and why did inflation turn into hyperinflation?
After the French occupied the Ruhr
—> German gov had to print more money to pay workers for paarticipating in passive resistance
How did the war affect the German economy in 1918?
- gov spent all of gold reserves on the war
- constantly printing money = severe inflation
- end of war = stop in production and trade of war goods
- farm production dropped by 20% during the war
- industrial output almost halved during war
- loss of agricultural and industrial land in Versailles slowed economy
What were the effects of hyperinflation?
- people relied on the black market and bartering
- black market prices grew so much it become inaccessible for most
- regions/businesses issued their own emergency money, ‘Notgeld’
- government cut back on staff (750,000 gov employees lost their jobs)
When did Gustav Stresemann become chancellor?
August 1923 Stresemann became chancellor at the head of the ‘Great Coalition’
—> head of the DVP (right-wing liberals)
—> chancellor for 100 days
What did Stresemann’s government receive on the 10th August 1923?
Emergency powers
—>power to postpone Reichstag meetings and govern by decree if necessary
(Gov could act quickly by skipping Reichstag or various coalition members)
What were Stresemann’s policies that ended hyperinflation?
- called off passive resistance in the Ruhr (helped economy as goods went back into production and gov could stop printing money to pay striking workers)
- introduced new currency = Rentenmark
- reduced gov spending and sacked 300,00 civil servants
- increased taxes
