Hyperinflation - 1923
Hyperinflation - 1923
Prices rise > workers demand higher wages > goods more expensive to make > prices rise again
This cycle continues over and over again. This is inflation.
This happened because during WW1 the German government paids its bills by printing more banknotes. However, this meant that there was more money in circulation and this makes prices rise.
Why is this event significant?
If effects Germany's economy. Due to Germany losing the Saar Coal Region to the League of Nations, it made it even harder for Germany to pay £6600 million from the Treaty of Versailles.
The Revolution of 1918 - 1919 and formation of the
Eisner and German Revolution
- 7th Nov 1918 - Kurt Eisner, leader of the Independant Socialist Democratic Party (USPD) declared Bavaria a Socialist Republic. Eisner became the first Republican Premier of Bavaria.
- 9th Nov 1918 - Kaiser abdicates and Ebert given power to form the Weimar Government. In Bavaria Eisner formed a coalition with the Socialist Democratic Party.
- 21st Feb 1919 - Eisner is shot and killed by a German nationalist called Anton Graf von Arco auf Valley. A new leader, Eugene Levine, was appointed.
- 29th April 1919 - Ebert ordered the Army and Freikorps into Bavaria. Levine was arrested and found guilty of being involved in the execution of 8 spies and of treason. He was shot by a firing squad.
The Spartacists - January 1919
- The Spartacas League were part of Germany's Communist Party. They staged a revolt in Berlin and tried to seize power and make Germany communist.
- After the army was limited, the government formed a group of volunteer soliders called the Freikorps. They hated communism and crushed the Spartacists revolution.
- The Spartacists leaders, Karl Liebknecht and Rosa Luxemburg were executed by the Freikorps on 15th Jan 1919.
- This led to bitter relations between Eberts SPD ( German Worker's Party) and the German Communist Party.
Economic, Political and Social effects of ToV on G
- Unemployment meant low income and less money spent, means low trade.
- Hyperinflation (change in value of currency) in 1923.
- Prime land lost (Saar Coal Region and Rhineland0.
- Loss of Alsace Lorriane.
- Germany struggled with the £6600 million reparations.
- No one likes new government.
- No one wants to be allies or trade with Germany.
- Lead to Kapp Putsch and Munich Putsch.
- Mass unemployment.
- Protests about high food prices.
- Germany had lost 1.7 million men and a futher 4.2 million injured in WW1.
Political Disorder of 1920-1923
Kapp Putsch -1920
- Ebert tried to disband the Freikorps and there was a rebelion. They marched on Berlin and declared Wolfgang Kapp as Germany's new leader.
- The army refused to fight the Freikorps and so Ebert and the government fled Berlin.
- Kapp was very unpopular and Ebert called a General Strike, which everyone obeyed.
- Everyone stopped working and soon gas, water and electricity was cut off and Berlin came to a hault.
- This event is significant as it showed that people supported Ebert by going on the General Strike, they started to like the Weimar Government.
Munich Putsch - 1923
- Adolf Hitler was leader of the Nazi Party and believed that the Republic was on the verge of collapse due to hyperinflation and France occupying the Ruhr.
- 8th Nov 1923 - Hilter and his supporters disrupted a meeting at a Beer Hall in Munich, where the Bavarian state government were having a meeting. Hitler forced the men to take part in his putsch they were Bavaria's MP Kahr, Bavaria's Police Cheif Seisser and Army Commander Lossow. The men agreed to take part and once they were free to leave they informed the army of Hitlers plans.
- 9th Nov 1923 - 3000 Nazi's lead by Hitler and General Ludendroff march on Munich. The police and army kill 16 Nazi. Hitler and Lundendroff are arrested for treason. Hitler is sentenced to 5 years but only serves 9 months.
Treaty of Versailles
- Germany was faced with reparations of £6600 million.
- Its army was reduced to 100,000 men and its navy 15,000.
- The War Guilt Clause - Article 231 - Germany must now accept all blame for starting WW1.
- The Rhineland area of Germany was demilitarised.
- The Saar Coal Region which was an important industrial area for Germany was lost to the League of Nations.
- Alsace-Lorraine was given back to France.
- Kaiser had to abdicate (step down from the throne).
- A new government was created called the Weimar Republic. Germany changed from an atuocracy (one leader who makes all decisions) to a democracy (people have a vote and say in what happens).
- The German people hated the new government for signing the armistice and called them 'November Criminals' and agreeing to the Treaty of Versailles was a 'stab in the back'.
- The Treaty of Versailles became known as 'diktat' or 'forced peace'.
- Germany struggled with reparations.
Constitution: A legal document that sets out the laws on which a country is based or governed.
Proportional Representation: Every vote counts towards a % of seats. e.g if a party gets 10% of votes = 10% of seats.
- Friedrich Ebert was president of the Weimar Republic - experienced.
- He died in office in 1925 - breaking point in the Weiman Republic.
Why was the Weimar Constitution weak?
- 1919, no party won more than 50% of votes thanks to proportional representation. There was no majority.
- All governments were coalitions between two or more parties and when faced with serious problems they often fell out.
- Aristocratc families, industrialists and the army did not support the new government. They wanted Germany to be ruled by one strong leader.
Gustav Stresemann and the recovery of Germany
Who was Gustav Stresemann?
- He's an appointed chancellor in August 1923. He believed that Germany's problems could be solved by cooperating with other countries.
- He is credited with creating stability economically and politically in Weimar Germany.
How did Stresemann help to end hyperinflation? What did this stabilise?
- He introduced a new currency, the Rentenmark. At the same time, government reduced spending (700,000 government employee's lost their jobs). These measures helped end hyperinflation and brought confidence back.
Why did extreme parties find it hard to get votes in the 1920's?
- Stresemann dealt with the putsch by the Nazi's in Munich. Later on he created political stability in Germany and extreme parties, such as communists and Nazi's found it difficult to win large numbers of seats in the Reichstag.
Stresemann's Successes #1
1924 - The Dawes Plan
- Negotiated with the Allies, and America agreed to loan Germany 800 million gold marks.
- It also decided that the reparations should be reduced and give Germany a longer amount of time to pay it back. This was good for Germany as it they were struggling to pay the economy-crippling reparations.
1925 - The Locarno Pact
- Stresemann signed the pact with France and Belgium, which means that the countries agreed to respect their common boarders.
1926 - League of Nations
- Germany joined the League of Nations, the international accpetance of Germany was reinforced in 1928.
*Continues on next card ...
Stresemann's Successes #2
1928 - Kellogg-Briand Pact
- The international acceptance of Germany was reinforced in 1928. Germany with 60 other countries signed the Kellog-Briand Pact, which renounced war as an instrument of foreign policy.
1929 - The Young Plan
- Germanys reparations were reduced by 67% and the country was given a timetable for making the payments.
Invasion of the Ruhr - 1923
Invasion of the Ruhr - 1923
- Germany was failing to meet it's reparation payments because it had lost valuable land to the Treaty of Versailles and also from hyperinflation.
- 1922 - Germany failed to meet a repayment, France and Belgium occupied the Ruhr area of Germany - an industrial heartland which was the centre of German's coal, iron and steel production.
- 11th Jan 1923 - France occupied the Ruhr with the intention of taking items which had the same value as the unpaid reparation, this was legal thanks to the Treaty of Versailles.
- The German government ordered a policy of passive resistance and German workers went on strike. Production fell and as a result France and Belgium couldn't take anything of value.
- 1925 - The French withdrew their army when Germany began negotiating the Dawes Plan.
Why was this event significant?
The invasion of the Ruhr is significant because the German people were listening to their government and trusting them and it payed off. France didnt get what it came for, the Dawes Plan would benefit Germany and other countries greatly.