hyperinflation

reparations

132B gold marks declared in 1921

to be payed in annual instalments through cash + resources eg coal + iron ore

immediate consequences

fall of the first govt.

new coalition formed w SPD, DDP and Centre Party

Joseph Wirth as chancellor who believed that G should meet requirements of ToV to increase chance of renegotiation

occupation of the Ruhr

reparation commission delcared G behind on coal + telegraph pole deliveries to France

60 000 French + Belgian troops occupy Ruhr Jan 1923

passive resistance

Ruhr occupation triggered anti-French sentiment

govt called for passive resistance

G workers went on strike + refused to cooperate

> 100 000 troops to control Gs

• 1000s forcibly removed

• >150 killed in protests eg. Krupp Steelworks Protests March 23

how passive resistance exacerbated hyperinflation

govt had pledged to support + pay wages of workers

had to spend more money to import coal to industries that had relied on the Ruhr

stats

govt costs up 700%

in Jan 1920 1 mark = 14 USD

in Nov 1923 1 mark = 200 000 000 000 USD

effects

those who profited

• landowners + famers

• industrialists + business owners able to wipe debts + sell on foreign markets

those who suffered

• people living on fixed wages + savings

• mostly middle + working class

consequences 

govt fell aug 1923

Gustave Streseman of German Worker’s Party called upon by FE to form new govt

formed coalition with SPD, CP, DDP, DVP (the great coalition)

Streseman policy

ceased passive resistance in the Ruhr

established the Rentenmark

• backed by value of all G land and industrial assets, not gold

• = 4.2 USD

cut govt spending

introduced a new G mark in 1924 once econ had stabilised

economic stability in the late 1920s

SPD embraced the need to provide welfare to win support

26% of GNP in 1928 was spent on welfare

1927 Unemployment Insurance Act covered > 17M workers