Post War Economy Flashcards
Did Germany have financial problems after the war?
Yes because of the defeat and revolution they experienced severe economic difficulties.
Why would Germany face financial problems after the war? ( 4 )
Financed war thorough borrowing and printing money
Plans for post war economic recovery in event of a victory
Lack of post war military sales
The reparations bill - 1.44 billion marks
What was the cost of war?
Borrowing and printing money
Gov debt grew and currency value fell
Idea that victory while lead to reparations from allies and industrial areas of losers - switched on then.
1919 : 1.44 billion
What was the Weimar earlier economy like? ( 5 )
1) Rise in taxation risked alienating
2) Weimar support for the new republic as anti - republic parties could claim increased taxes was done to pay the reparations
3) Military spending reduced by civil service still needed to be paid.
4) To ensure support for Weimar future govs avoided making civil servants redundant and extended welfare benefits
5) Cause of the severe political difficulties it’s clear no gov wanted to raise taxes/cut benefits to sort out economy
What were the negatives of hyper inflation?
1) Prices doubled between 1918 and 1919 then quadrupled between 1919 and 1920.
2) 1920 coalition led by fehrenbach was dominated by Centre party and supported by industrialists who were benefiting
3) These industrialists took short term bank loans to expand as the repayment amount reduced by inflation
4) This wasn’t the same for reparations as they weren’t being paid in gold marks or goods
Who was Konstantin Fehrenbach?
Leading member of centre party
President of Reichstag 1919 - 1920
Chancellor in 1920
Led the first cabinet in new republic
What were the Inflation Positives?
1921 - unemployment was 1.8% which encouraged investment
Especially from USA
Left unchecked led to serious consequences - 1923 hyperinflation
