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?
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