Economic and social problems

• What strategy did Germany's wartime governments use to finance the war?

  Increased borrowing and printing more money.
• What was the flawed calculation behind Germany's wartime financial strategy?

  That Germany would win the war and recoup losses by annexing industrial areas.
• How much debt did the Weimar Republic face in 1919?

  1.44 billion marks.
• What options do governments have to reduce national debt?

  Raise taxes, reduce spending, or do both.
• Why were raising taxes and reducing spending risky for the Weimar Republic?

  They risked alienating support for the new republic and were politically unstable.
• What was the state of unemployment in Germany by 1921?

  Unemployment had virtually disappeared.
• How did the German economy transition from war to peace compared to other European economies?

  It coped much more successfully than other European economies.
• What was the outcome of unchecked inflation in Germany by 1923?

  It became hyperinflation.
• What did the Treaty of Versailles require from Germany?

  Germany had to pay reparations in cash and goods.
• How much did the Reparations Commission conclude Germany should pay?

  132 billion gold marks, or £6.6 billion.
• What happened in January 1922 regarding Germany's reparations payments?

  The Reparations Commission granted a postponement of payments.
• What did Germany request in November 1922 regarding reparations?

  A loan of 500 million gold marks and a release from obligations for three to four years.
• What was the response of the French to Germany's request for a loan in 1922?

  They were deeply suspicious and refused to agree to Germany's requests.
• What event occurred in 1923 regarding reparations and the Ruhr industrial area?

  French and Belgian forces occupied the Ruhr to extract payment by force.
• How did reparations payments affect Germany's government debt?

  They made repayment of the government debt even more difficult.
• What was the consequence of the German government's response to reparations payments?

  They printed more money, worsening inflation and devaluing the mark.
• Who was the English economist critical of the Allied demand for reparations after World War I?

  John Maynard Keynes
• What was Keynes's calculated 'safe maximum figure' for Germany's capacity to pay in reparations?

  £2 billion
• According to Keynes, how would the burden of reparations affect the economies of Allied countries?

  It would hamper economic recovery across the continent
• What did modern historian Peukert argue about the final figure for reparations?

  It was manageable for Germany, amounting to only 2 percent of its gross national product
• How did German governments respond to the reparations issue in the immediate post-war years?

  They allowed inflation to spiral to support their foreign policy objectives
• What event prompted the Franco-Belgian occupation of the Ruhr in January 1923?

  Germany fell seriously behind in its payment of reparations to France
• What was the aim of the French and Belgian occupation of the Ruhr?

  To seize coal, steel, and manufactured goods as reparations
• What was Chancellor Wilhelm Cuno's response to the occupation of the Ruhr?

  He stopped all reparations payments and ordered a policy of 'passive resistance'
• What did the policy of 'passive resistance' entail for Germans living in the Ruhr?

  They would not cooperate with the French authorities
• How did the German government support workers during the strikes in the Ruhr?

  They promised continued wages for striking workers
• What actions did paramilitary troops take against the French during the occupation?

  They organized acts of sabotage against the French
• What were the economic results of the occupation for the German economy?

  They were catastrophic due to several factors including strikes and loss of tax revenue.
• Why did the German government face a drain on finances during the occupation?

  Because it had to pay wages or provide goods for striking workers.
• How did the occupation affect tax revenue in Germany?

  Tax revenue was lost from closed businesses and unemployed workers.
• What was the effect of the shortage of goods on prices in Germany during the occupation?

  It pushed prices up further.
• What was the combined cost of the economic effects of the occupation compared to annual reparations payments?

  It amounted to twice the annual reparations payments.
• How did hyperinflation affect the value of money in Germany?

  Money lost its meaning as prices soared to unimaginable levels.
• What did workers do with their wages during the hyperinflation crisis?

  They tried to spend their money immediately before prices rose further.
• How did farmers respond to the food shortages during hyperinflation?

  They were confronted by angry city dwellers trying to take food from farms.
• What was one of the key rights established in the Weimar Constitution of 1919?

  Every German citizen should have the right to work or to welfare.
• What were the key reforms to the welfare system in Germany after the Weimar Constitution was established?

  • 1919: Maximum working day limited to eight hours.
  • 1919: State health insurance extended to wives, daughters, and the disabled.
  • 1919: National government responsible for aid to war veterans, widows, and orphans.
  • 1922: National Youth Welfare Act established child protection and education rights.
• How did the social welfare budget impact the German government during hyperinflation?

  It put a huge demand on the government, exacerbating the hyperinflation crisis.
• Who were considered the winners during the hyperinflation crisis in Germany?

  Those who speculated and manipulated the situation to their advantage.
• What role did black-marketeers play during hyperinflation?

  They bought up food stocks and sold them at inflated prices.