Economic development and policies, 1918-32 Flashcards
How much money did the government owe by 1918?
150 billion marks
Why was the government in debt?
The government had borrowed heavily during the war. The policy of reparations laid down by the Treaty of Versailles put the government even deeper into debt.
How did the government deal with this debt?
By carrying on borrowing and printing more money instead of raising taxes.
What happened in 1923?
The occupation of the Ruhr by Belgium and France.
What were the consequences of the occupation of the Ruhr?
Escalated inflation into hyperinflation. Prices were now going up several times a day. A newspaper that cost 1 mark in May 1922 cost 100,000 marks in September 1923 and 700 billion marks by November 1923. People lost their faith in money and began using the black market.
What was Stresemann’s policy of recovery?
He replaced the almost worthless mark with the Rentenmark in October 1923.
What were the Dawes and the Young Plans of 1924 and 1929?
Agreements made between Germany and the Allies that reduced the amount to be paid in reparations and extended the time in which to pay it.
What was the Great Depression?
Wall Street Crash. The US economy collapsed in 1929 and the US banks not only stopped renewing short-term foreign lending, but also called in loans from abroad.
How did the Great Depression affect Germany?
In Germany industrial production fell. By the end of 1932, it was about half its 1928 levels. Unemployment rose and wages fell by 20-30%.
Define deflation.
Keeping prices low by reducing government spending.
