Economic + social problems in Germany 1919 - 24

• The wartime government chose to finance the war through increased borrowing and printing more money.
• Debt grew and the value of the currency fell.
• Britain financed the war through a combination of higher taxes and government borrowing.
• Germany’s risky strategy was based on the calculation they would win the war.
• The government didn’t want to raise taxes as this would decrease support for the republic.
• By 1921 Germany’s unemployment had virtually disappeared.
• By 1921 unemployment in Germany was only 1.8% compared with nearly 17% in Britain.
• Im 1914 4 German marks were worth 1 dollar.
• By 1922 160 German marks was worth 1 dollar.
• By November of 1923 4,200,000,000,000 marks were worth 1 dollar.
• Who benefitted?

  • weimar gov (when the new currency was introduced)
  • mortgage holders
  • farmers
  • black marketeers
  • big businesses
• Who lost out?

  • the weimar gov was politically weak
  • workers
  • pensioners
• Causes of hyperinflation: to pay soldiers and to pay treaty reparations.