Economic and Social Problems in Germany 1919-24

Economic and Social Problems in Germany 1919-24

1. Economic

   • Impact of the Reparations
     • War debt
       • £6.6 billion
     • Insufficient gold reserves to repay Gold Marks
     • Loss of territory after Versailles = Harder to make coal payments
     • Exports hampered by Allies confiscating Germany's entire merchant navy fleet.
     • Response?
       • Print money
         • Decreasing value of mark
         • Increasing Inflation.
   • Inflation 1918-1922
     • Franco -- Belgian Occupation of the Ruhr.
       • Ger. fell behind on coal payments by end of 1922
       • 100,000 troop occupation force
       • Occupied Ruhr in Jan. '23 to force compliance with Treaty.
       • Seized coal, steel and manurfactured goods
       • Ctrl. of railways, mines, factories, steelworks
       • German Response
         • Cuno was powerless due to only having 100,000 man army
         • Passive Response
           • Non- cooperation
         • Government paid striking workers.
         • Sabotage French infrastruture
         • French Response
           • Military Courts
           • 150,000 Germans expelled from Ruhr
           • 132 Germans shot
           • Brought in French workers
       • Total output of Ruhr fell to around 1/5th of pre--occupation production
   • Hyperinflation
     • Government didn't increase taxes, so had to print money to meet its outgoings.
     • The price of Bread rose from 1,200 in summer 1923 to 428,000,000,000 in Nov. 1923.
     • Food Shortages
     • Rioting and Looting.

2. Political and Social impact of Hyperinflation

   • Political Impact of Hyperinflation
     • Left
       • Prices outstripped Wages
       • Poorer Families suffered food shortages as they had nothing to barter.
       • Autumn '23 unrest, riots and strikes.
       • KPD plan Revolution from Saxony.
     • Right.
       • French occupation fueled nationalism
       • Fear of Communist revolution by middle class (mittlestand)
       • September 1923 government surrender and passive resistance showed another surrender/ stab in the back.
       • Far right planned a Putsch through Gustav von Karr in Baravia
   • Social Impact of Hyerinflation
     • Winners
       • Speculators
       • Hugo Stinnes
         • Owned German Luxemburg mining company and other businesses. He took large loans to buy property to businesses and the n he could easily pay it back at a lower cost to him.
       • Black Market food stocks sold at high prices.
       • Debts could easily be payed off.
       • Enterprising businesses took loans to kick start themselves then
       • Paying rent becomes easier.
       • Foreigners money was worth more.
       • Rural communities increased demand
     • Loosers
       • Fixed income
       • War widows allowance. reduced amount people income was worth.
       • War bond interest decreased in value.
       • Fixed rent landlords were badly hit
       • Wage increase for laburers didn't keep up with inflation
       • End of 1923 29.3% employed
       • Mittlestand was in trouble as their small businesses as their prices rose yet still couldn't keep up with inflation.
       • Death rate increased as the cost of supplies did.
       • Suicide rates dramatically increased

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