Germany hyperinflation crisis 1923
- Created by: Jessica millar
- Created on: 09-06-18 15:58
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- Hyperinflation crisis of 1923
- Occupation of the Rhur
- Cause
- Germany had fallen behind on reparation payments
- France and Belgian sent 60,000 men to occupy the Rhuhr
- They brought in their own workers to work the railways
- Aim of the troops was to seize the areas coal, goods and steel as reparations
- The Rhur was part of the Rhineland whuch had been demilitarised in the TOV so Germans could not fight back
- As they could not fight back Chancellor Wilhelm Cuno responded by stopping reparation payments and ordered passive resistance
- Passive resistance = know one in the Rhur area to co-operate with the French
- Government promised that the workers would still receive their wages if they went of parliamentary strike
- 132 Germans shot and 150,000 Germans expelled from the area during the occupation
- Cause
- Economic effects of the occupation
- 1. Paying the workers wages and providing them with good during passive resistance was a bigger strain on Government finances
- 2. Tax revenue was lost from businesses which had to be close and those who became unemployed
- 3. Germnay had to import foreign coal and pay for it from the limited foreign currency reserves
- Social impact of hyperinflation
- Winners
- Black-marketeers who bought food and sold it at inflated prices
- Those with debts and mortgages that could pay them off with the worthless currency
- Buisinesses who took out loans and re-payed them once the currency had devalued further
- Those paying rent as the value of the the rent they were paying decreased
- Farmers as food was in demand and money was less important to them
- Losers
- Pensioners as the value of their pension decreased
- Those who had lent money to the government during the war as the interest decreased
- Landlords who were reliant on fixed rents as they're source of income
- Workers wages increased yet not at the same rate as inflation so living standards declined
- Only 29.3% of the workforce were employed
- Mittlestand were effected as their costs rose and could not keep up with the pace of inflation
- The sick were badly hit as medical prices increased as well as food prices which led to widespread malnutrition
- Also saw an increase in suicide
- Winners
- Occupation of the Rhur
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