Germany hyperinflation crisis 1923

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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
    • 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

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