1923 Trouble for the Weimar Republic

Created by

Lina Gall

Cards (6)

Reparations
In the Treaty of Versailles, Germany was ordered to pay reparations to the winning countries
In 1921, it was specified that they had to pay 132 billion gold marks - or £6.6 billion - in yearly installments for the next 66 years
Later that year, the German government scraped together their first installment of 2 billion gold marks and handed it over to France and Belgium
These were the two countries that had been most damaged by the fighting
Some of the payment was in gold, but most of it was in goods like coal, iron and wood
Germany fails to pay
In 1922, when the next payment was due, the Germans announced that they could not afford to pay
The French and Belgians didn't believe them and decided to take what they were owed by force
In January 1923, 60,000 French and Belgian soldiers marched into the Ruhr, a rich, industrial area of Germany
They took control of every factory, mine and railway in the region
They also took food and goods from shops and arrested any Germans who stood up to them
The consequences of this invasion were remarkable
They led to the hyperinflation of 1923 and loaves of bread costing 201 billion marks
The process of hyperinflation in Germany 
French and Belgian soldiers began to take what was owed to them from Germany back to France
The German government ordered its workers in the Ruhr to not fight back, but instead go on strike and not help the soldiers remove goods from the country. This was known as passive resistance
French and Belgian soldiers were tough with the strikers. Over 100 of them were killed, and 15,000 were thrown out of their homes as punishment
The German government met to discuss the crisis. They promised to continue paying the workers on strike, because they were only doing what the government told them to do. To make matters worse, Germany was running short of money because the Ruhr wasn't producing coal, iron and steel to sell to other nations
To pay their striking workers, the government printed large amounts of money - but this caused lots of problems
The consequence of mass printing money
The striking workers were being paid for not working, and began to spend their money quickly. In response, shopkeepers began to put up their prices
As shops raised their prices all over Germany, the government responded by printing even more money to help people buy things. But the more money the government printed, the faster prices went up
The faster prices went up, the faster people spent their wages. Soon workers were being paid twice a day. They carried their wages around in wheelbarrows, which wasn't even enough to buy a decent meal. The price of goods even rose between joining the back of a queue and reaching the front
As expected, the German government and the Weimar politicians lost a lot of support in 1923, since people looked for someone to blame. Their savings had become worthless
The impact of hyperinflation
By 1923, German money was worthless
The government had printed so much that it lost all its value
People started to use money to light fires, or to make paper planes and kites to fly
Unsurprisingly, many Germans blamed their government for the mess, because it was their decision to call a strike in the Ruhr and then to print so much money
For most Germans, 1923 was the worst year since the end of the First World War
The impact of hyperinflation on Germans
People with savings in the bank were the biggest losers. Some people had saved all their lives to get 1,000 marks in the bank. By 1923, this wouldn't even buy them a loaf of bread
Elderly people who lived on fixed pensions found their income wouldn't buy what they needed any more
Many small businesses collapsed as normal trade became impossible because of the daily price changes
People who borrowed money found it very easy to pay off their debts. They were the real winners. If a person had borrowed 10,000 marks in 1920 (a lot of money then), they could now pay off their debt with one banknote