Economic Crisis & Hyperinflation

Reasons for the occupation of Ruhr?

• The Treaty of Versailles imposed reparations in 1921 at 6.6 billion

• Germany failed to pay its second installment of reparations in 1922

• France and Belgium decide to occupy the Ruhr in January 1923 seize coal to the value of money owed

Results of the occupation of Ruhr

• Weimar government authorized passive resistance: German workers refused to work in the mines or accept orders

• Passive resistance did not work and Industrial production fell, further weakening the economy

Causes for Hyperinflation

• The Ruhr was one of the main wealth producing areas in Germany

• To bridge the gap between income and expenditure, the government printed money

• This led to hyperinflation during the second half of 1923

Results of Hyperinflation

• The middle class was particularly badly hit by hyperinflation as they lost their savings

• They blamed the government for their misfortune and started to lose faith in the Weimar Republic