Causes of Economic Crisis 1919 -1923

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  • Created by: Panda113
  • Created on: 23-10-15 11:51

Occupation of the Ruhr

Retaliation to Germany only paying 1 installment of £50 million out of the £6600 million by 1921.

French and Belgian troops invaded the Ruhr.

French troops - 750, 000

German troops - 100, 000 (due to the Treaty)

It was an unfair battle. 

The German government suggested passive resistance, however, this ideology caused further economic hardship and people weren't being paid.

150 000 German people expelled from their homes by the French.

130 German people killed by French soldiers.

Government was responsible for finding new homes for those who had been expelled, however, they were unable to do this as they didn't have the resources.

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Hyperinflation

Shortages of supplies meant that the cost of living increased.

The government needed money to pay their debts (£2200 million of war loans), but due to unemployment and failing factories, revenue from taxes decreased.

They began to print money.

So much money was printed that the currency became worthless.

In 1921 a loaf of bread costed 1 mark, by 1923, the same loaf of bread costed 100 000 million marks.

Some farmers and businesses profited.

Most people suffered, particularly those with savings and pensions in the bank.

Some people were paid twice a day so that they could buy supplies before the price increased again.

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