Economic and social issues in Weimar Germany

How were Germany's war efforts financed by the country's government?
Increased borrowing + printing of money
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What did this strategy lead to in Germany?
Rising debt + falling currency value
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How much debt were the Weimar Republic in by 1919?
1.44 billion marks
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Why couldn't the Weimar government raise taxes to tackle inflation?
They risked alienating supporters and inviting scorn from rivals insisting taxes were for reparations
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Why couldn't the Weimar government reduce spending to tackle inflation?
Civil servants needed to be paid in order to keep fragile govt. support
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Explain why hyperinflation was allowed to happen from a political standpoint.
Fehrenbach coalition supported by industrialists who benefited from inflation through short-term loans - these had reduced value .
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Name two positive impacts of hyperinflation.
Less unemployment (1.8% compared to 17% in GB), less govt. debt
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Who led the cabinet after Fehrenbach resigned?
Joseph Wirth
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What was the government's policy of fulfillment?
Signed ToV + quickly paid - cooperation = sympathy = revised terms
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Jan. 1922
Reparations Committee postpones Jan/Feb installments of Germany's reparation payments
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July 1922
German govt. asked for further postponement of reparation payments
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Nov. 1922
Govt. asks for 50 million mark loan + release from obligations for 4-5 years to stabilize currency
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Why couldn't the German government afford coal payments?
Coal reserves were lost in ToV
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Why couldn't the reparation payments be made w/ manufactured goods?
Workers in allied countries refused; saw threat to businesses.
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Why couldn't the reparation payments by made from foreign currency reserves?
Allies restricted Ger. exports - confiscated merchant fleet, put high tariffs on imported goods
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What is J.M Keynes' view on the reparations payments?
Damaging to economies of Germany AND Allies
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What is Peukert's view on the reparations payments?
Effect exaggerated - only 2% of country's gross national product
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When was the Ruhr invaded?
Jan. 1923
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What led to the Ruhr invasion?
Germany fell behind on coal payments to France
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What was the aim of the Ruhr invasion?
Seize area's coal/steel/manufactured goods as reparations
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What was the number of men occupying the Ruhr within a year of the invasion?
100,00
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What did Chancellor Cuno do in response to the occupation?
Stopped all reparation payments, ordered policy of passive resistance
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Under what condition did the government promise to keep paying the workers?
If they went on strike
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How many Germans were expelled from the Ruhr?
150,000
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Name one way in which the occupation of the Ruhr adversely affected its economy.
Its output was approx. ⅕ of pre-occupation output
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Give one economic effect on the Ruhr occupation on Germany.
Shortage of goods increased prices, had to import coal
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How did the Ruhr invasion lead to hyperinflation?
Govt refused to raise taxes and printed more money instead
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What problems did the rising price of food lead to?
Shortages due to hoarding and riots.
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How does the price of bread over 1923 show inflation's rapid rise?
A kilo cost 233 billion marks by Nov.
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Who were the key people that needed to be helped by social welfare?
Sailors/soldiers/workers from 1918 revolution, those injured/bereaved in WW1
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What sorts of people were the "winners" of hyperinflation?
Those w/ means to manipulate situation to their advantage
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How did black marketeers benefit from hyperinflation?
Bought foods stocks + sold them at inflated prices
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How did people w/ debts/mortgages/loans benefit from hyperinflation?
Able to pay back owed money in worthless currency
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How did businesspeople benefit from hyperinflation?
Took out loans + repayed them once the currency had further devalued
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How did businessman Hugo Stinnes benefit from hyperinflation?
Able to raise large bank loans in 1923 + purchase forests to supply lumber for mines
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What sorts of people were the "losers" of hyperinflation?
Those relying on savings, investments, fixed income or welfare
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How were purchasers of war bonds disadvantaged by hyperinflation?
Interest payment value ↓
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How were unskilled/non-trade union workers disadvantaged by hyperinflation?
Wage increases didn’t keep up w/ rising prices → standards of living declined.
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What percentage of people were unemployed by the end of 1923?
29.3%
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How were artisans and small business owners disadvantaged by hyperinflation?
Costs rose, prices charged couldn’t keep up w/ inflation.
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How were the sick disadvantaged by hyperinflation?
Medical care costs ↑, rising food prices → malnutrition.
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How were many of the middle class affected by hyperinflation?
Many had their savings wiped out + lifestyles destroyed.
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Other cards in this set

Card 2

Front

Rising debt + falling currency value

Back

What did this strategy lead to in Germany?

Card 3

Front

1.44 billion marks

Back

Preview of the back of card 3

Card 4

Front

They risked alienating supporters and inviting scorn from rivals insisting taxes were for reparations

Back

Preview of the back of card 4

Card 5

Front

Civil servants needed to be paid in order to keep fragile govt. support

Back

Preview of the back of card 5
View more cards

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