What was the impact of the Treaty on the Economy? (CH1) Flashcards
What was the impact of the Reparation Terms?
- The figure was set to 6.6 billion as compensation for the war
- National humiliation
- Struggled to rebuild the country and business after the war
- High unemployment which caused a lot of anger
- Couldn’t pay installments and the gov began to print meaningless money
- Hyperinflation
Why was 1923 a year of Crisis for the WR?
Because of the Hyperinflation and the Munich Putsch
They were still in financial crisis and had to pay 6.6 billion. They were still hated by other countries and had no support.
Why did the occupation of the Ruhr happen?
Germany couldn’t pay its 1922 installments to France but the French were determined to make Germany pay
What happened at the Ruhr?
In January 1923, the French and Belgian troops marched into the Ruhr
It was the most industrial region, with 80% of Germany’s steel production.
The French thought they could take the steel and make up for Germany’s reparation
Effects of the invasion of Ruhr
The humiliated government responded with a policy of ‘Passive resistance’ ordering a general strike where the workers refused to work
This damaged the economy as they had no money to spend and weren’t producing anything
The government tried to help by printing more money.
What caused Hyperinflation?
The government tried to help the workers to carry on their strike by printing more money. The value of money decreased and when money has no value it’s called hyperinflation.
What were the effects of hyperinflation?
The government kept printing money and money became more worthless.
People couldn’t afford to buy things and became angry with the government.
Billion mark notes were printed and people had to carry money in wheelbarrows
Who were badly affected by Hyperinflation?
- Pensioners
- Middle class
Who benefitted or were not affected by hyperinflation?
- The rich
- The workers
- Hitler (began Munich putsch)
