3. weimar economy

• In June of 1919 the Weimar government accepts the conditions of the Treaty of Versailles
• The Allies fix the reparation payments to 132 billion marks in April of 1932
• In January 1923 French and Belgian troops invade the Ruhr after Germany fail to pay reparations.
• In November 1923 the Rentenmark is introduced to help end the hyperinflation crisis.
• In April 1924 the Dawes Plan is agreed to lower the burden of reparations on the German economy.
• In 1928 German agriculture suffered a severe crisis due to a worldwide slump in food prices
• From October to November of 1928 there is a lockout of workers in the Ruhr by employers after a breakdown of industrial relations.
• In June of 1929 the Young PLan is agreed with the allies to further lower the reparation burden on the economy
• In October 1929 the Wall Street crash wiped out millions of dollars from the American stock markets
• In March 1930 the growing economic crisis causes the collapse of the German government. Bruning becomes chancellor.
• In June 1931 three major German banks collapse setting off a severe financial crisis
• In February 1929 unemployment reaches 6 million.
• In July 1932 Germany ends reparation payments.
• The Treaty of Versailles did not set an amount, it was a 'blank cheque'.
• Many areas in Germany still had rationing in place in 1919 when Versailles was signed.
• By 1919 Germany had an huge internal debt of 144,000 million marks.
• Germany financed the war using many short terms loans and infalting the currency as the believed Britain and France would have to pay it off.
• By 1919, the currency has lost over 1/3 of its pre war value.
• In 1919 Germany was running a trade deficit, and industrial potential was severed by the loss of the Saarland and Upper Silesia.
• As the mark fell in value, Germany's export trade increased and unemployment fell sharply.
• In April 1921 the Reparations Commission recommended a total liability of £6,600 million pounds (132 billion marks) in annual instalments of £100 million.
• In April 1921 annual payments were equivalent to one quarter of all German exports.
• Between 1914 and 1918 Germany had borrowed almost 150 billion marks. By raising tax they could generate M7 or M8 billion but this only covered the interest on their debt.
• Prices in Germany rose 200% between 1914 and 1918.
• By 1932, German exports had declined by 50%.
• By 1932, the price of German goods had fallen by 50%.
• civil servants and government employees wages were cut about 20% between 1930 and 1932
• The majority of homelessness came from unskilled young people who could not find work and never expected to
• half of all young people between 16 and 30 were unemployed
• The welfare budget would only cover around 800,000 unemployed people and only for a few months based on an assumption of growth
• The American stock market crashed in 1929 which, combined with the electoral appeal of the Nazis in 1930, prompted many US investors to call in their loans from Germany.
• Hitler claimed rearmament was the way to end the crisis, he said the that US and GB were making the trade rules to keep Germany down
• between 1929 and 1932, German wages fell by 14%.
• As the Chancellor Bruning was making the crisis worse, Hitler was promising 'Work and Bread' and real solutions
• Bruning’s attempts to deal with the depression was to cut wages and raise taxes but these measures failed to boost the economy.
• Unemployment rose, from 1.8 million in 1919 to 5.6 million in 1932
• Muller refused to cut welfare spending so the grand coalition that had ruled since 1928 fell apart
• Whole families were loosing their homes and living on the streets
• The withdrawal of American loans caused 5 German banks to collapse. This led to a general panic as investors withdrew all their money and 50,000 businesses went bankrupt
• By 1932, German unemployment was at 29.9%.