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Economic problems 1918 - 23
- Bankruptcy
- Germany had no money - all was
spent on war, which they then
lost.
- Treaty of Versailles made things
worse - deprived Germany of
wealth-earning areas, such as
coalfields in Silesia. Also made
German government pay for
reperations - victors, especially
France, needed money to pay war
debts to USA, so no reductions were
made. However, with no gold
reserves/ falling income, by 1923,
Germany could no longer pay.
- Had to pay 6.6 billion marks -
reperations. Could be paid in
material/goods aswell as cash (eg.
coal/iron)
- Germany had no money - all was
spent on war, which they then
lost.
- Occupation of the Ruhr
- As the Germans couldn't pay, French
confiscated raw materials, manufactured
goods and industrial machinery. As a result of
this, workers went on strike. Germany's troop
was reduced to 100,000 and France had
750,000
- Occupation of Ruhr
did France little good,
but did Germany even
worse. Disruption
increased Germany's
debts, unemployment
and shortage of
goods.
- As the Germans couldn't pay, French
confiscated raw materials, manufactured
goods and industrial machinery. As a result of
this, workers went on strike. Germany's troop
was reduced to 100,000 and France had
750,000
- Inflation
- Shortages meant the prices went up - inflation.
Had to pay more for essentials.
- Government needed money
to pay debts, but they
recieved less money from
taxes.
- During 1919-23, government income was only a quarter of
what was required, so government printed more money.
- 1923 -government had
300 paper mills and 2000
printing shops, just to
print money.
- Made it easier initially for
government to pay
reperations - made
inflation even worse. More
money was printed - more
prices rose. This lead to
hyperinflation
- Made it easier initially for
government to pay
reperations - made
inflation even worse. More
money was printed - more
prices rose. This lead to
hyperinflation
- Shortages meant the prices went up - inflation.
Had to pay more for essentials.
- Who was effected?
- Everyone
suffered from
shortages. 1918 -
£1 cost 20 marks.
By November
1923 - £1 cost 20
billion marks.
- Everyone found it
difficult to buy what
they needed. Many
workers were paid
twice a day, so they
could rush out and
buy goods before
prices rose further!
Extreme suppliers
refused to take money
at all - asked for
swapping goods
instead.
- People with savings were
hit hardest. Savings
became worthless -
mainly middle class.
- Big business men and
industrialists were well benefitted.
Others did well by hoarding goods
- Everyone
suffered from
shortages. 1918 -
£1 cost 20 marks.
By November
1923 - £1 cost 20
billion marks.
- Resolution
- August 1923, new chancellor
was appointed - Gustav
Stresemann. November 1923,
he cancelled old mark and
made a new currency -
Rentenmark. This lead to a
period of stability.
- Germans blamed
Weimar Republic for
their suffering.
- August 1923, new chancellor
was appointed - Gustav
Stresemann. November 1923,
he cancelled old mark and
made a new currency -
Rentenmark. This lead to a
period of stability.
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