Economic and Social Problems in Germany 1919-24
- Created by: Becca Newman
- Created on: 06-06-19 12:21
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- Economic and Social Problems in Germany 1919 - 24
- Financial Problems
- German government borrowing money and printing more left them in a lot of debt
- Government of the Republic had 1.44 billion marks worth of debt
- A rise in taxes might alienate support
- They had civil servants to pay so could not reduce spending
- However by 1921 national unemployment had virtually disappeared
- Due to inflation prices doubled between 1918-19 and quadrupled in 1919-20.
- The 1920 coalition was led byu industrialist who gained from inflation by taking short term loans to expland their businesses
- Inflation also lessened the government's burden of debt
- Government of the Republic had 1.44 billion marks worth of debt
- German government borrowing money and printing more left them in a lot of debt
- Impact of Reparations
- Political impact of reparations
- When the reparations of £6.6 billion were presented to the German Republic - the cabinet of Fehrenbach resigned in protest + was replaced by another lad by Chancellor Joseph Wirth
- There was no other option but to sign it
- The German economy was in no state to pay the reparations, and the Reparations committee granted postponement of the january and february installments
- In November 1922 they asked for a loan of 500 million gold marks and to be excused from paying for 3-4 years, to get the economy under control.
- The French refused
- In November 1922 they asked for a loan of 500 million gold marks and to be excused from paying for 3-4 years, to get the economy under control.
- The German economy was in no state to pay the reparations, and the Reparations committee granted postponement of the january and february installments
- There was no other option but to sign it
- When the reparations of £6.6 billion were presented to the German Republic - the cabinet of Fehrenbach resigned in protest + was replaced by another lad by Chancellor Joseph Wirth
- Economic Impact of reparations
- Germany's gold reserves were inadequate for the payments which had to be made in gold
- Workers and manufacturers in other countries refused for them to be paid in goods because it threatened their work
- The German merchant fleet was confiscated, so trade couldn't be increased to make payments
- The Allies were making it very difficult for the payments to be made paid
- Political impact of reparations
- The Hyperinflation Crisis of 1923
- The Franco-Belgian occupation of the Ruhr
- By the end 1922 Germany had fallen behind in its payments
- The French sent 60,000 troops to occupy the Ruhr
- they took control of the mines, factories, steelworks and demanded food s from the shops + set up machine gun posts in the streets
- The French sent 60,000 troops to occupy the Ruhr
- Chancellor Wilhelm Cuno ordered 'passive resistance' - no one would cooperate with the French authorities
- German workers were promised their wages would be paid by the government
- Paramilitary groups working with the government blew up railways at night and disrupted the French effort secretly
- The French set up courts and punsihed workers who went against them
- 132 Germans were shot during the 8 month occupation
- By May 1932 output of the Ruhr had fallen to a fifth of its preoccupation output
- By the end 1922 Germany had fallen behind in its payments
- The Economic Effects of the Occupation
- Paying wages + providing food for striking workers was another burden on the government
- Tax revenue was lost from closed businesses + workers who became unemployed
- Germany had to import coal from other countries
- Shortage of goods meant prices went up
- The Hyperinflation Crisis
- Printing presses supplied banks with worthless money - money lost its meaning
- Workers collected wages in wheelbarrows + tried to spend it immediately before prices went up more
- There were food riots and people looted shops + tried to take food from farms + were greeted with angry farmers
- The Franco-Belgian occupation of the Ruhr
- Social Welfare
- Those who helped bring the down the Kaiser wanted a better + freer life
- Every German citizen should have the right to work + welfare
- This led to a series of reforms of rights
- Social Impact of Hyperinflation
- Losers
- Pensioners/war widows living on pensions
- Those who lent money to the government during the war
- Landlords reliant on fixed rents
- By 1923 only 29.3% of the workforce were employed
- The Mittelstand (small business owners) were badly hit
- Medical care costs rose - the sick were badly afected
- There was a rise in diseases
- Winners
- Black marketers who brought up food stocks and sold them at inflated prices
- Those who had debts, mortgages and loans could pay them in worthless currency
- Helped enterprising people who took out new loans and repaid them in worthless currency
- Those on fixed rents
- Owners of foreign exchange and foreigners living in Germany
- Farmers in the countryside because food was more important
- Losers
- Financial Problems
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