HISTORY: Hyperinflation of 1923

The hyperinflation crisis of 1923

What caused the hyperinflation crisis?

The hyperinflations crisis occurred in 1923 after the Germans failed to pay a reparations payment as scheduled to France and Belgium. In response to this, France and Belgium sent troops to the Ruhr Valley, Germany's main industrial area, with the aim to confiscate industrial goods as an alternative payment. They occupied coalmines, railways, and factories, all of which Germany's economy relies on.

In response to this, the German government ordered workers to follow a policy of passive resistance, detailing that in order to receive their wages they must refuse to work or co-operate with the foreign troops.

France decided on two punishments; workers refusing to take orders were either shot at or were expelled from the Ruhr region altogether. Overall, 132 were killed and approximately 150,000 expelled from the area.

Consequently, the Weimar government had to print…