Theme 3: Reacting to economic challenges, 1918-31 Flashcards
What were the economic effects of hyperinflation?
1) Many people in debt, such as mortgage holders, paid off their loans with the devalued currency.
2) Industrialists enjoyed cheap credit facilities from the Reichsbank. (Hugo Stiennes controlled 20% of German industrial potential.
3) 1 US dollar was worth the same amount of 4.2 trillion marks. A wheelbarrow full needed to buy a loaf of bread.
What were the social effects of hyperinflation?
1) The destruction of the middle class.
2) City dwellers attacked country dweller as they gorged themselves while they starved.
What were the political effects of hyperinflation?
The government called a strike in the Ruhr as French and Belgium soldiers occupied the Rhur and wanted them to leave. they had to print more money to pay the striking workers.
How did the government solve the problem of passive resistance costing too much money?
They introduced the policy of fulfilment.
effect: they no longer had to pay striking workers in the Ruhr, which meant that they had less need to print money.
How did the government solve the problem of spending too much money?
They initiated deep cuts in public spending.
effect: They cut civil servant pay, sometimes by up to 50%.
Benefits were slashed.
How did the government solve the problem of the currency becoming worthless?
They introduced a temporary new currency called the Rentenmark.
effect: its value remained stable. The old mark was phased out and regular forms of trading and payments were able to restart.
In 1924 a new reichsmark was introduced.
What was achieved through the Dawes Plan?
1) Germany received a loan of 800 million gold mark, provided mainly by US business leaders.
2) If paying reparations disrupted German economic stability the USA had the right to allow Germany to take a payment holiday.
3) The annual repayment amount was reduced by 1929.
4) Repayments would be allowed over a longer period of time to reduce the annual reparations bills.
What was the impact of the Dawes Plan?
1) Solved Germany’s immediate reparation problems.
2) By late 1920s German GDP had recovered to its 1913 level and tax revenues were increasing.
3) As the German economy grew it attracted more investment from overseas.
4) Germany was able to invest more in the industry. (industry became more profitable so wages rose every year)
Which group prospered the most during the 1920s?
Working-class people-however, they suffered from lower wages during hyperinflation and the depression.
Women could go further in education and professions ('white blouse jobs') than ever before-however, during times of hardship they would be the first to lose their jobs.Which groups suffered the most?
The middle class lost their savings.
Women and ethnic minorities were the most likely to be fired or receive lower wages.
Farmers did well in the early years but suffered from 1925 onwards due to a severe drop in food prices.
In what ways did living standards affect the stability of the Weimar Republic?
People were happier with the situations they were in and so wouldn’t oppse the Weimar. Rebellions stopped and people were happy.
What were the economic and social consequences of the depression?
Huge decline in industrial production and agricultural prices.
Between 1929-1932,exports fell by 55%.
Unemployment rose-1.8million, 5.6 million in 1932.
Half off all young people between 16 and 30 were unemployed .
State benefits were reduced -15% received nothing.
Widespread poverty and homelessness creating a dependence on charities and soup kitchens.
