Economic Crisis & Hyperinflation

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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

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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

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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

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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