Economic Problems 1918-1923 Flashcards Preview

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Flashcards in Economic Problems 1918-1923 Deck (12):

What economic problems did Germany face immediately after WWI?

- It had spent its gold reserves to finance the war effort
- The ToV had taken away wealth-earning areas (e.g. coalfields in Silesia)
- The ToV forced the German govt. to pay massive reparations £6.6bn


When did the French occupy the Ruhr?

In 1921 and in 1923


Why did the French occupy the Ruhr?

- Because Germany fell behind on its reparation payments. The French occupied it to take raw materials, manufactured goods and industrial machinery.


Why was the Ruhr important to the German economy?

- The Ruhr was industrially rich. Around 80% of German coal, iron and steel was based there as well as many German factories.


What were the economic consequences of the occupation of the Ruhr?

- The German economy was crippled as a result of the occupation. It increased German debts, increased unemployment and created a shortage of goods - leads to inflation.


When did inflation begin in Germany?



When did hyperinflation begin?



What were the consequences of hyperinflation?

- Everyone found it difficult to buy normal goods (eventually many people started swapping goods rather than using money to pay for them)
- Everyone suffered from shortages (the value of the German mark became worthless internationally. 1918, £1 = 20 marks. 1923, £1 cost 20 billion marks. Therefore foreign suppliers refused to accept the German mark as payment and imports dried up)
- People's savings were wiped out because money had basically lost its value. This hit the middle class hardest.
- By 1923, a loaf of bread cost 200,000 billion marks (1 mark in 1919)


Who was appointed Chancellor in August 1923?

Gustav Stresemann


What did Stresemann do in November 1923?

Introduced a new currency, the Rentenmark. This led to a period of stability.


Overall, what were the consequences of this period?

- Most Germans suffered
- Many people blamed the Weimar Republic for the problems
- The middle classes, natural supporters of the Weimar Republic, suffered most


Who did the German people blame for the occupation of the Ruhr?

The German people blamed both the French AND the Wiemar Govt. for failing to resist