Weimar

German inflation began to build up during World War One

THE PROBLEMS OF THE REPUBLIC

Problem Four: Economic Crisis

Germany had been experiencing inflation since 1914.
Often we assume that the hyper inflation crisis that happened in 1923 was just the result of a decision to print lots of bank notes. The reality is quite different, the Kaisers government had begun the policies that led to inflation during the war. Inflation happens when prices rise faster than wages, and it normally means that there is lots of money and not enough goods to spend it on. Germany came under massive economic strain during the war, all governments fighting the war expected it to last six months. When it began to drag on for years, in order to avoid going bankrupt, the German government printed money to pay for arms and to buy foodstuffs for the army. The Kaiser decided not to impose any taxes on the German people during the war and instead decided to borrow money in order to carry on fighting, assuming that when Germany eventually won the defeated nations would be forced to pay back Germanys debts. When Germany herself was defeated, the debt was added to by reparations and inflation began to increase. Germany was forced to part with large sections of her industry by the Treaty of Versailles and many inventions and scientific advances that had made Germany rich were given away to Britain, France and America. By 1921 the allies became suspicious that Germany might be paying her debts to them in worthless paper, so they insisted on reparations being paid in gold instead, but Germany simply bought in gold and paid for it by printing millions of new banknotes, thus starting hyper inflation. In 1922 the Mark was valued at 320 to the US Dollar, but by the end of the year it was at 800 Marks. When France and Belgium invaded the Ruhr in 1923, the government called for passive resistance and called a general strike, but paid workers in the countrys biggest industrial region by printing money. The result was inflation of 4,210,500,000,000 by November 1923

Things to remember
* Inflation was originally caused by the Kaisers Government * Inflation happens when prices race ahead of wages and the currency loses its value. * The Weimar Government printed money to avoid facing the real cost of reparations.

Three Quick Questions

Question One: Why did the war turn out to be so costly for Germany? (Knowledge) Question Two: To what extent was the Weimar Republic responsible for inflation? (Judgement) Question Three: How important was the economic crisis in determining the fate of Weimar? (Evaluation)