The challenges of 1923

• Between 1914 and 1915, the government printed more money to pay for the First World War, but it didn’t have more gold – it was bankrupt
• Between 1918 and 1922, The Weimar government printed more money for post-war shortages and asked for longer to pay the first reparations instalment
• In January 1923, French troops invaded the Ruhr to take reparations payments in goods and raw materials. German workers went on strike. 80% of German coal, iron and steel reserves were in the Ruhr and many of its factories. The occupation was a disaster for Germany’s economy.
• The Weimar government printed more money to pay strikers and make up for loss of coal, steel and iron production and by November 1923, the German mark was worthless
• Due to hyperinflation, people could not afford basic things such as bread. Wages rose but not as quickly as prices did
• People with fixed incomes suffered the most, as their pay stayed the same as prices continued to rise. Savings also became worthless, which massively effected the middle class
• The weimar government was blamed for the hyperinflation, making the republic even more unpopular
• Foreign visitors of Germany had currency which was worth a lot more than the German mark, which meant they could buy more
• Positives of the hyperinflation:

  • Fixed rent for rooms or shops made them become very cheap
  • It allowed people to pay off their loans and mortgages
  • Farmers were paid more for food
• Hyperinflation made the price of bread go from 1 mark in 1919 to 20 billion marks 1923