Made by Fariha Uddin, Rothna Akhter and Nabilah Chowdhury
• Imperial Germany’s financial policy- not to increase taxation
• Shortage of consumer goods and higher demands meant prices rose
• Weimar government: Increased taxation but didn’t balance the budget
• Relied on revenue from consumer goods but required inflation to continue
• Reparation- added to the economic burden
• ‘Holiday’ from making reparations payment
• Occupation of the Ruhr
• Passive resistance- strikes and promises to pay for wages meant government was unable to collect tax
Ruhr Crisis 1923
• Germany defaulted on reparations due to the domestic financial crisis
• 60,000 Franco/Belgian troops occupied the Ruhr
• Passive resistance: refused to work/collaborate with the Belgian and French troops • German government promised to pay their wages
• French & Belgian authorities arrested mine owners and took over railways and mines
• German government unable to collect tax from the Ruhr- French reduced their coal supply • Hyperinflation: Printed even more money which led to the collapse of the currency
Price of bread
• Prices ran out of control
428 billion marks
How did Reparations cause economic crisis in 1922-23?
TREATY OF VERSAILLES – placed heavy reparations on Germany.
- Between 1919-21: 23 conferences to discuss levels of reparations to be paid.
CONFERENCE, FEBMAY 1921
Reparation payment amounts to each country:
- France: 52%
- Italy: 10%
- Belgium: 8%
- Smaller powers.
Reparations commission decided upon: 226
MARKS. (milliardthousand million)
Set new figure: 132
Failure to agree/pay 1st instalment would result in the invasion of the
Ruhr by French forces. REPARATION (1918) HYPERINFLATION (1923)
Reparations made matters worse
- 1919: national debt: 144 milliard gold marks
- 1922: 469 milliard marks
- As a result of this huge debt on reparations, German’s kept printing money to cover its debts, resulting in HYPERINFLATION.
- HYPERINFLATION: prices spiralled out of control because the government increased the amount of paper money being printed. This displaced the economy. THUS, REPARATIONS LED TO/ CAUSED HYPERINFLATION.
OVERALL: “Was hyperinflation crisis of 1923 the worst threat so far to the Weimar
Republic?” If not, what was?
- Period of 1918-23 spiralled down for…