Hyper-Inflation and the French Occupation of the Ruhr

  • Created by: Gem_22
  • Created on: 27-05-15 14:12

French Occupation of the Ruhr

In 1923, the French occupied the Ruhr as Germany missed their second installment of reparations. The French believed that Germany could pay and were just refusing to, so they occupied the Ruhr which was an industrial town so it made a lot of Germany's money.

The German people went into passive resistance, which meant they refused to work so fewer goods were coming from the Ruhr. This forced the French to leave the Ruhr.

The passive resistance meant that Germany had made a huge loss of money. To counter this, Ebert printed more money, which led to hyper-inflation.

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Meaning of Hyper-Inflation

Inflation is when wages of people go up, prices of products also increase because businesses can get more money. For example, Freddo started at 5p and is now about 25p, so it shows that people's wages have gone up over the years.

Hyper-inflation is a period of rapidly accelerating inflation where the prices of goods rises continuously and dramatically. Money loses its value and goods became more expensive. For example, bread went from 1 mark to 1200 marks.

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Effects of Hyper-Inflation on Germany.

  • Many savings became worthless.
  • Some people became very rich, whilst others became very poor.
  • Many children had a lack of clothes.
  • Food was too expensive to get.
  • Employees on fixed income sank into poverty.
  • People would rush to buy stuff on pay day before the prices were increased again.
  • The price of things like bread, eggs, butter, beef and shoes rose dramatically.
  • Money was cheaper to burn than newspaper.
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Specific Examples of People who Suffered

Workers on fixed income
Money recieved on a fixed income became worthless as prices rose, so they quickly sunk into poverty.

Middle Class
Any savings in the bank suddenly became worthless, so they lost a lot of money.

They could sell an item for one price and a few hours later it could be worth more, so they would lose out.

They money they were getting became worthless so they had to go back to work.

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Specific Examples of People who Benefitted

They would pay off the whole cost of their herds by selling one cow.

They would trade in things they didn't want to get exactly what they wanted.

Their cattle and crops became worth far more than they origionally bought them for.

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