The Hyperinflation crisis

Question 1

French and Belgian occupation of the Ruhr

Answer 1

In November 1922 Germany defaulted on its scheduled reparation payments. The French thought Germany could make the payment but were choosing not to. The German government argued they could not afford to pay. In response, France and Belgium sent troops into Germany’s main industrial area, the Ruhr Valley.

Question 2

Why did they do this?

Answer 2

Their aim was to confiscate industrial goods as reparations payments as they didn’t believe Germany was unable to pay the second instalment. They occupied coal mines, railways, steel works and factories (all things that were important to Germany’s economy).

Question 3

What did the German government order workers to do?

Answer 3

They ordered them to follow a policy of ‘passive resistance’ and in return they would be paid their normal wages

Question 4

What did the government do to pay the people and their reparations?

Answer 4

Print huge amounts of money-this was the start of the hyperinflation crisis

Question 5

Hyperinflation

Answer 5

1) Germany was already suffering from high levels of inflation due to the effects of the war and government debt.
2) ‘Passive resistance’ meant that whilst workers were still being paid, the production of goods had halted in the Ruhr-this weakened the economy further
3) In order to pay the striking workers the government printed more money
4) Prices ran out of control

Question 6

Hyperinflation winners

Answer 6

1) Borrowers, such as businessmen, landowners and those with mortgages, found they were able to pay back their loans easily with worthless money.
2) People on wages were relatively safe, because they renegotiated their wages every day. However, even their wages eventually failed to keep up with prices.
3) Farmers coped well, since their products remained in demand and they received more money for them as prices spiraled.

Question 7

Hyperinflation losers

Answer 7

1) People on fixed incomes, like students, pensioners or the sick, found their incomes did not keep up with prices.
2) People with savings and those who had lent money, for example to the government, were the most badly hit as their money became worthless.

Question 8

Rebellions

Answer 8

1) A nationalist group called Black Reichswehr rebelled in September.
2) Communists took over the governments of Saxony and Thuringia in October.
3) Communists also took over the Rhineland and declared it independent in the same month.
4) A fascist group called the Nazis attempted a putsch in Munich in November.