Challenges of 1923: Hyperinflation

• How much did a loaf of bread cost in 1923?

  200,000 billion marks
• Why did people have to carry money in baskets and wheelbarrows?

  Because the currency had lost its value, requiring large amounts to purchase goods
• Why were many workers paid twice a day during hyperinflation?

  To allow them to buy goods before prices rose further
• What economic practice began to replace money during hyperinflation?

  Barter (swapping goods)
• Why did foreign suppliers refuse to accept German marks?

  Because the marks had become valueless
• What was the consequence of having a valueless currency for imports?

  Imports dried up, leading to shortages of food and other essential goods
• How were the working class affected by hyperinflation compared to the middle class?

  The working class had some protection due to rising wages, while the middle class saw their savings become worthless
• What negative effect did hyperinflation have on the Weimar Government?

  It caused the middle class, their biggest supporters, to blame the government for the hyperinflation
• How did people on fixed incomes, such as pensioners, cope during hyperinflation?

  They found it very difficult to survive as their pensions became worthless
• What was the political consequence of hyperinflation in Germany?

  Extremist parties gained in strength
• By 1923, a loaf of break cost 200,000 billion marks.
• People had to carry bundles of money in baskets and wheelbarrows.
• Many workers were paid twice a day, so they could buy goods before prices rose futher.
• Barter (swapping goods) began to replace money.
• Foreign suppliers refused to accept German marks for goods, so imports dried up.
• It was impossible to import goods with a valueless currency and that meant there were shortages of food and other essential goods.
• The working class were to some extent protected, because their wages went up every week and they were paid daily. Unemployment, however, grew as normal business was disrupted.
• People with savings (especially the middle class) saw them become worthless. This had negative effects on the Weimar Government, as the middle classes were their biggest supporters, and saw hyperinflation as the government’s fault.
• People on fixed incomes (such as pensioners) found it very difficult to survive, because their pensions became worthless.
• Extremist parties gained in strength.