Core Notes 9
Introduction:
Has been claimed worst consequence of inflation was damage done to German middle class → Stresemann himself said as much in 1927.
Later on in the 1930s it was generally assumed that the reason a large proportion of the middle class voted for Nazis was b/c of economic sufferings in 1923.
In light of recent historical research, such assumptions have come to be questioned + much more complex interpretation has emerged about impact of inflation on whole of society.
The Franco-Belgian Occupation of the Ruhr:
By end of 1922 Germany had fallen seriously behind in payment of reparations to France in form of coal → prompted French, together with Belgians, to send a military force of 60,000 men to occupy the Ruhr in industrial area in January 1923 in order to force the Germans to comply with Treaty of Versailles.
The Ruhr: heavily industrialised area of western Germany that includes town of Dusseldorf, Essen + Dortmund; at that time, it generated 85% of German coal + also had many large iron + steel works + engineering factories.
Aim = to seize area’s coal, steel + manufactured goods as reparations.
Troops occupied whole Ruhr area + in course of 1923 no. of occupying forces grew to 100,000.
Took control of all mines, factories, steelworks + railways, demanded food from shops + set up machine gun posts in the streets.
How did Germany respond?:
Govt. of Chancellor Wilhelm Cuno knew Germans couldn’t fight back → the Versailles Treaty reduced size of German army + Rhineland, of which the Ruhr was part, was demilitarized.
Wilhelm Cuno: (1876-1933) a lawyer + businessman who had no party allegiance. Germany went through many changes of coalition cabinets during this period + Cuno was chosen as Chancellor b/c it was thought his business experience would help him steer Germany through difficult economic times.
Instead Cuno responded by stopping all reparations payments + ordering policy of ‘passive resistance’ whereby no one living in the area, from businessmen and postal workers to railwaymen + miners, would cooperate with French authorities.
German workers promised by govt. that their wages would continue if they went on strike while paramilitary troops working with German army secretly organized acts of sabotage against French.
Paramilitary: group of civilians organized into military style group with uniforms + ranks; such groups take on military functions.
They crossed customs barrier secretly at night + blew up railways, sank barges + destroyed bridges in order to disrupt French effort.
How did France respond?:
Scale of French operation grew in response → French set up military courts + punished mine owners, miners + civil servants who wouldn’t comply with authority.
Around 150,000 Germans were expelled from the area + worse still some miners were shot after clashes with police.
Altogether 132 Germans were shot in the 8 months of the occupation, including a 7 year old boy.
French also brought in own workers to operate railways + get coal out of Ruhr, but this didn’t prove particularly effective.
In May 1923, deliveries were only 1/3 of average monthly deliveries in 1922 + output in Ruhr had fallen to around 1/5 of pre-occupation output.
Economic Effects of the Occupation:
Economic results of occupation, and policy of passive resistance, were catastrophic for German economy for no. of reasons:
i) paying wages/providing goods for striking workers was further drain on govt. finances.
ii) tax revenue was lost from those whose businesses were closed + workers who became unemployed.
iii) Germany had to import coal + pay for it from the limited foreign currency reserves within the country.
iv) Shortage of goods pushed prices up further.
Combined cost of all this amounted to twice annual reparations payment.
Since the govt. still refused to increase taxes, its only option was to print more money = trigger for hyperinflation that gripped Germany during course of 1923.
Hyperinflation Crisis:
During hyperinflation crisis, money lost its meaning as prices soared to unimaginable levels.
Printing presses worked continuously to keep banks supplied with worthless paper money.
Workers collected their wages/salaries in wheelbarrows + shopping baskets + tried to spend money immediately before prices rose even further.
Rising prices for food had most serious effects → food began to run short as speculators hoarded supplies in anticipation of higher prices in the future
In many areas this led to breakdown in law + order → food riots when crowds looted shops + gangs of city dwellers travelled to the countryside to take food from farms, but were confronted by angry farmers determined to protect their livelihoods.
Also decline in ‘morality’ e.g. more prostitution.
Large increase in no. of convictions for theft.
People bartered their possessions in exchange for vital supplies.
Historian Konrad Heiden, then a German student, described situation during hyperinflation crisis: “ The printing presses of the government could no longer keep pace. You could see mail carriers on the streets with sacks on their backs or pushing prams before them, loaded with paper money that would be devalued the next day. Life was madness, nightmare, desperation, chaos. Communities printed their own money, based on goods, on a certain amount of potatoes, of rye, for instance. Shoe factories paid their workers in bonds which they could exchange at the bakery for bread or at the meat market for meat”.
Increase in prejudice + tendency to find scapegoats e.g. Jewish people.
Has been suggested that such social problems contributed to people’s lack of faith in republican system → connection difficult to prove, as not easy to assess importance of morality and religious codes in past societies.
H/e would be foolish to dismiss out of hand their effects on German society + its traditional values → at very least, loss of some old values led to increased tensions.
Even more significantly, when another crisis developed at end of decade, people’s confidence in ability of Weimar to maintain social stability was lost.
In that sense, inflation of 1923 wasn’t reason for Weimar Republic decline but created damaging climate that continued to affect republic in future years
Price of Bread:
Rye bread = one of staples of German diet.
In Jan 1923 a kilo loaf cost 163 marks.
By October the price had soared to 9 million marks + by 19 November it had risen again to 233 billion marks.
Number of American dollars to one German mark in 1914 = 4.2. By 15 November 1923 this was 4.2 billion.
Social Welfare:
Those involved in revolution of Nov. 1918- sailors, soldiers + workers who had helped to bring down Kaiser – motivated by desire for better + freer life.
Also v. large no. of people who needed support as result of death/injury during the war.
Challenge for those politicians who wrote Weimar Constitution in 1919, and for those who served in later coalition govts. was to enshrine those aspirations into new legal rights.
One of the key rights set out in the constitution was that every German citizen should have the right to work or to welfare → led to series of reforms to welfare system + to employment rights.
1919: law passed limiting working day to max. of 8 hours.
1919: state health insurance system, introduced by Bismarck but limited to workers in employment, was extended to include wives, daughters + the disabled.
1919: Aid for war veterans incapable of working b/c of injury became responsibility of national govt.; aid for war widows + orphans was also increased.
1922: National Youth Welfare Act required all local authorities to set up youth offices with responsibility for child protection + decreed all children had right to education.
H/e social welfare budget put huge demand on govt.
Printing of money was largely pay out to welfare benefits that the Weimar Republic was committed to providing, which exacerbated hyperinflation crisis.
Social Impact of Hyperinflation: The Winners:
Hyperinflation wasn’t disaster for everyone – there were winners as well as losers within increasingly divided German society.
Winners included people who had means + guile to speculate + manipulate situation to their advantage.
Black-marketeers who bought up food stocks + sold them at vastly inflated prices.
Those who had debts, mortgages + loans did well since they could pay off money owed in worthless currency.
Hyperinflation also helped enterprising business people who took out new loans + repaid them once the currency had devalued further.
Those leasing property on long-term fixed rents gained b/c the real value of the rents they were paying decreased. Owners of foreign exchange + foreigners living in Germany could also benefit.
In countryside, most farmers coped well since food was in demand + money was less important in rural communities. Also peasants coped reasonably as they depended less on money for necessities of life as they were more self-sufficient.
Hugo Stinnes – one of the winners:
Hugo Stinnes was the owner of substantial businesses before 1923, owning the German = Luxemburg Mining Company + Rhine-Westphalian Electric Company.
Was also a deputy of the DVP in the Reichstag.
With his businesses providing security, and using his political contacts, he was able to raise large bank loans in 1923 + purchase whole forests to supply lumber to his mines.
He went on to build an empire that included 150 newspapers + magazines, plus interests in railways, banks + more.
By the end of 1923, controlled 20% of German industry.
Social Impact of Hyperinflation: The Losers:
Those relying on savings, investments, fixed income or welfare support lost out.
Among these were students, the retired and the sick.
Pensioners were particularly badly hit, including war widows living on state pensions.
Those who had patriotically lent money to the govt. in wartime by purchasing fixed interest rate ‘war bonds’ also lost out b/c the interest payments decreased in value.
Landlords reliant on fixed rents were hit badly.
Of the workers, the unskilled + those who didn’t belong to trade unions fared worst. Although workers were given wage increases, these didn’t keep up with rising prices, so standards of living declined. By 1923 there was also an increase in unemployment and shorttime working: at the end of the year only 29.3% of the workforce was fully employed.
Artisans + small business owners – the Mittelstand – were badly hit. Their costs rose + the prices they charged couldn’t keep pace with inflation. They also paid a disproportionate share of taxes.
Mittelstand: ‘middle rank’; a large but diverse social group including small farmers, small shopkeepers + artisans; without steady sources of income, they felt themselves to be vulnerable to inflation and tended to look to govts. to protect their position.
The sick were very badly hit. The costs of medical care increased whilst the rapid rise in food prices led to widespread malnutrition. Death rates in large cities increased. Suicide rate also went up.
Amongst children suffering from malnutrition, the incidence of diseases such as tuberculosis and rickets – both of which are associated with dietary deficiency – increased.
Effects of hyperinflation varied between different classes + geographic regions.
Nevertheless it was an ‘unreal’ time, which left many people uncertain about what the future might hold.
Many, but not all, middle-class people became impoverished as a result of hyperinflation + were left with sense they’d lost the most.
These people had grown up believing in hard work, thrift + saving for the future, only to find their savings wiped out + their comfortable lifestyles destroyed.
Civil Servants:
Difficult to analyse → income fell sharply in years 1914-20, but made real gains 1921-2.
Suffered again in chaos of 1923 b/c depended on fixed salaries which fell in value before end of each month.
Tended to gain – if they were buying a property on a mortgage – but many had been attracted to buying war bonds + so lost out.
Impact on health:
Early Feb. 1923, health minister F. Bumm announced: “ we do have a preliminary mortality rate for towns with 100,000 or more inhabitants. After having fallen in 1920-1,it has climbed again for the year 1921-2, rising from 12.6 to 13.4 per thousand inhabitants…this, oedema [an unpleasant medical condition which occurs when water accumulates in parts of the body] is reappearing, this so-called war dropsy, which is a consequence of a bad and overly watery diet. There are increases in stomach disorders and food poisoning, which are the result of eating spoiled foods. There are complaints of the appearance of scurvy, which is a consequence of an unbalanced and improper diet. From various parts of the Reich, reports are coming in about an increase in suicides…More and more often one finds ‘old age’ and ‘weakness’ listed in the official records as the cause of death; these are equivalent to death through hunger”.
Historical Interpretations of Great Inflation:
Traditionally portrayed as a catastrophe with damaging consequences that paved the way for collapse of Weimar Republic + rise of Nazism.
However a number of economic historians have perceived issue differently.
Historian C.L. Holtfrerich, writing in 1980s, maintains that in years up to end of 1922, Weimar’s economic policy amounted to a ‘rational strategy…in the national interest’.
His interpretation is that, by not reducing the budget deficits, Weimar Republic was able to maintain economic growth + increase production.
He argues that German economy compared favourably with other European economies that also went into recession in 1920-1:
i) Low unemployment: Whereas Britain’s unemployment rate was 17% in 1921, Germany had nearly full employment.
ii) Rising wages: real wages of workers increased between 1918-22.
iii) Growing foreign investment: Foreigners’ capital, particularly from the USA, provided important stimulus to economic activity.
iv) Industrial production: Nearly doubled from 1919-22, albeit from low base b/c of war.
Holtfrerich doesn’t accept policy was a disaster → in fact, he sees it as the only way that could have ensured the survival of the Weimar Republic; he argues that in early years of 1921-2 any policy that required cutting back spending would have resulted in most terrible economic + social consequences, and perhaps even the collapse of the new democracy. In this sense the inflation up to 1923 was actually beneficial.
This interpretation remains controversial → Holtferich has been criticized for drawing an artificial line at 1922 – as if the years up to 1922 were those of modest and ‘good’ inflation, whereas year 1923 marked start of hyperinflation with problems arising from that date.
Seems a rather doubtful way of looking at overall development of Great Inflation, bearing in mind the long-term build-up + nature of causes. It also tends to separate inflation from drastic measures that were eventually required to solve it.
Finally, an assessment of the Great Inflation must consider other important factors, such as social + psychological. There is always a danger to economic historians to rely largely on a study of economic and financial data.
Summary:
In immediate post-war years, German economy, in common with economies of all countries involved inn war, had to adjust from wartime to peacetime conditions.
After such a long + damaging conflict, transition bound to be difficult.
In some ways, German govts. coped well with change as unemployment kept low in 1921-22 when other countries, in particular Great Britain, were experiencing a severe post-war depression.
Nevertheless legacy of war + defeat left Germany with serious debt.
On top of this, large reparations payments demanded by Allies added to Germany’s economic difficulties.
Price inflation, largely due to govts. printing more and more money to close the gap between revenue + spending was constant feature of these post-war years.
By 1923 inflation spiraled out of control + brought chaos to millions of Germans.
Introduction:
Has been claimed worst consequence of inflation was damage done to German middle class → Stresemann himself said as much in 1927.
Later on in the 1930s it was generally assumed that the reason a large proportion of the middle class voted for Nazis was b/c of economic sufferings in 1923.
In light of recent historical research, such assumptions have come to be questioned + much more complex interpretation has emerged about impact of inflation on whole of society.
The Franco-Belgian Occupation of the Ruhr:
By end of 1922 Germany had fallen seriously behind in payment of reparations to France in form of coal → prompted French, together with Belgians, to send a military force of 60,000 men to occupy the Ruhr in industrial area in January 1923 in order to force the Germans to comply with Treaty of Versailles.
The Ruhr: heavily industrialised area of western Germany that includes town of Dusseldorf, Essen + Dortmund; at that time, it generated 85% of German coal + also had many large iron + steel works + engineering factories.
Aim = to seize area’s coal, steel + manufactured goods as reparations.
Troops occupied whole Ruhr area + in course of 1923 no. of occupying forces grew to 100,000.
Took control of all mines, factories, steelworks + railways, demanded food from shops + set up machine gun posts in the streets.
How did Germany respond?:
Govt. of Chancellor Wilhelm Cuno knew Germans couldn’t fight back → the Versailles Treaty reduced size of German army + Rhineland, of which the Ruhr was part, was demilitarized.
Wilhelm Cuno: (1876-1933) a lawyer + businessman who had no party allegiance. Germany went through many changes of coalition cabinets during this period + Cuno was chosen as Chancellor b/c it was thought his business experience would help him steer Germany through difficult economic times.
Instead Cuno responded by stopping all reparations payments + ordering policy of ‘passive resistance’ whereby no one living in the area, from businessmen and postal workers to railwaymen + miners, would cooperate with French authorities.
German workers promised by govt. that their wages would continue if they went on strike while paramilitary troops working with German army secretly organized acts of sabotage against French.
Paramilitary: group of civilians organized into military style group with uniforms + ranks; such groups take on military functions.
They crossed customs barrier secretly at night + blew up railways, sank barges + destroyed bridges in order to disrupt French effort.
How did France respond?:
Scale of French operation grew in response → French set up military courts + punished mine owners, miners + civil servants who wouldn’t comply with authority.
Around 150,000 Germans were expelled from the area + worse still some miners were shot after clashes with police.
Altogether 132 Germans were shot in the 8 months of the occupation, including a 7 year old boy.
French also brought in own workers to operate railways + get coal out of Ruhr, but this didn’t prove particularly effective.
In May 1923, deliveries were only 1/3 of average monthly deliveries in 1922 + output in Ruhr had fallen to around 1/5 of pre-occupation output.
Economic Effects of the Occupation:
Economic results of occupation, and policy of passive resistance, were catastrophic for German economy for no. of reasons:
i) paying wages/providing goods for striking workers was further drain on govt. finances.
ii) tax revenue was lost from those whose businesses were closed + workers who became unemployed.
iii) Germany had to import coal + pay for it from the limited foreign currency reserves within the country.
iv) Shortage of goods pushed prices up further.
Combined cost of all this amounted to twice annual reparations payment.
Since the govt. still refused to increase taxes, its only option was to print more money = trigger for hyperinflation that gripped Germany during course of 1923.
Hyperinflation Crisis:
During hyperinflation crisis, money lost its meaning as prices soared to unimaginable levels.
Printing presses worked continuously to keep banks supplied with worthless paper money.
Workers collected their wages/salaries in wheelbarrows + shopping baskets + tried to spend money immediately before prices rose even further.
Rising prices for food had most serious effects → food began to run short as speculators hoarded supplies in anticipation of higher prices in the future
In many areas this led to breakdown in law + order → food riots when crowds looted shops + gangs of city dwellers travelled to the countryside to take food from farms, but were confronted by angry farmers determined to protect their livelihoods.
Also decline in ‘morality’ e.g. more prostitution.
Large increase in no. of convictions for theft.
People bartered their possessions in exchange for vital supplies.
Historian Konrad Heiden, then a German student, described situation during hyperinflation crisis: “ The printing presses of the government could no longer keep pace. You could see mail carriers on the streets with sacks on their backs or pushing prams before them, loaded with paper money that would be devalued the next day. Life was madness, nightmare, desperation, chaos. Communities printed their own money, based on goods, on a certain amount of potatoes, of rye, for instance. Shoe factories paid their workers in bonds which they could exchange at the bakery for bread or at the meat market for meat”.
Increase in prejudice + tendency to find scapegoats e.g. Jewish people.
Has been suggested that such social problems contributed to people’s lack of faith in republican system → connection difficult to prove, as not easy to assess importance of morality and religious codes in past societies.
H/e would be foolish to dismiss out of hand their effects on German society + its traditional values → at very least, loss of some old values led to increased tensions.
Even more significantly, when another crisis developed at end of decade, people’s confidence in ability of Weimar to maintain social stability was lost.
In that sense, inflation of 1923 wasn’t reason for Weimar Republic decline but created damaging climate that continued to affect republic in future years
Price of Bread:
Rye bread = one of staples of German diet.
In Jan 1923 a kilo loaf cost 163 marks.
By October the price had soared to 9 million marks + by 19 November it had risen again to 233 billion marks.
Number of American dollars to one German mark in 1914 = 4.2. By 15 November 1923 this was 4.2 billion.
Social Welfare:
Those involved in revolution of Nov. 1918- sailors, soldiers + workers who had helped to bring down Kaiser – motivated by desire for better + freer life.
Also v. large no. of people who needed support as result of death/injury during the war.
Challenge for those politicians who wrote Weimar Constitution in 1919, and for those who served in later coalition govts. was to enshrine those aspirations into new legal rights.
One of the key rights set out in the constitution was that every German citizen should have the right to work or to welfare → led to series of reforms to welfare system + to employment rights.
1919: law passed limiting working day to max. of 8 hours.
1919: state health insurance system, introduced by Bismarck but limited to workers in employment, was extended to include wives, daughters + the disabled.
1919: Aid for war veterans incapable of working b/c of injury became responsibility of national govt.; aid for war widows + orphans was also increased.
1922: National Youth Welfare Act required all local authorities to set up youth offices with responsibility for child protection + decreed all children had right to education.
H/e social welfare budget put huge demand on govt.
Printing of money was largely pay out to welfare benefits that the Weimar Republic was committed to providing, which exacerbated hyperinflation crisis.
Social Impact of Hyperinflation: The Winners:
Hyperinflation wasn’t disaster for everyone – there were winners as well as losers within increasingly divided German society.
Winners included people who had means + guile to speculate + manipulate situation to their advantage.
Black-marketeers who bought up food stocks + sold them at vastly inflated prices.
Those who had debts, mortgages + loans did well since they could pay off money owed in worthless currency.
Hyperinflation also helped enterprising business people who took out new loans + repaid them once the currency had devalued further.
Those leasing property on long-term fixed rents gained b/c the real value of the rents they were paying decreased. Owners of foreign exchange + foreigners living in Germany could also benefit.
In countryside, most farmers coped well since food was in demand + money was less important in rural communities. Also peasants coped reasonably as they depended less on money for necessities of life as they were more self-sufficient.
Hugo Stinnes – one of the winners:
Hugo Stinnes was the owner of substantial businesses before 1923, owning the German = Luxemburg Mining Company + Rhine-Westphalian Electric Company.
Was also a deputy of the DVP in the Reichstag.
With his businesses providing security, and using his political contacts, he was able to raise large bank loans in 1923 + purchase whole forests to supply lumber to his mines.
He went on to build an empire that included 150 newspapers + magazines, plus interests in railways, banks + more.
By the end of 1923, controlled 20% of German industry.
Social Impact of Hyperinflation: The Losers:
Those relying on savings, investments, fixed income or welfare support lost out.
Among these were students, the retired and the sick.
Pensioners were particularly badly hit, including war widows living on state pensions.
Those who had patriotically lent money to the govt. in wartime by purchasing fixed interest rate ‘war bonds’ also lost out b/c the interest payments decreased in value.
Landlords reliant on fixed rents were hit badly.
Of the workers, the unskilled + those who didn’t belong to trade unions fared worst. Although workers were given wage increases, these didn’t keep up with rising prices, so standards of living declined. By 1923 there was also an increase in unemployment and shorttime working: at the end of the year only 29.3% of the workforce was fully employed.
Artisans + small business owners – the Mittelstand – were badly hit. Their costs rose + the prices they charged couldn’t keep pace with inflation. They also paid a disproportionate share of taxes.
Mittelstand: ‘middle rank’; a large but diverse social group including small farmers, small shopkeepers + artisans; without steady sources of income, they felt themselves to be vulnerable to inflation and tended to look to govts. to protect their position.
The sick were very badly hit. The costs of medical care increased whilst the rapid rise in food prices led to widespread malnutrition. Death rates in large cities increased. Suicide rate also went up.
Amongst children suffering from malnutrition, the incidence of diseases such as tuberculosis and rickets – both of which are associated with dietary deficiency – increased.
Effects of hyperinflation varied between different classes + geographic regions.
Nevertheless it was an ‘unreal’ time, which left many people uncertain about what the future might hold.
Many, but not all, middle-class people became impoverished as a result of hyperinflation + were left with sense they’d lost the most.
These people had grown up believing in hard work, thrift + saving for the future, only to find their savings wiped out + their comfortable lifestyles destroyed.
Civil Servants:
Difficult to analyse → income fell sharply in years 1914-20, but made real gains 1921-2.
Suffered again in chaos of 1923 b/c depended on fixed salaries which fell in value before end of each month.
Tended to gain – if they were buying a property on a mortgage – but many had been attracted to buying war bonds + so lost out.
Impact on health:
Early Feb. 1923, health minister F. Bumm announced: “ we do have a preliminary mortality rate for towns with 100,000 or more inhabitants. After having fallen in 1920-1,it has climbed again for the year 1921-2, rising from 12.6 to 13.4 per thousand inhabitants…this, oedema [an unpleasant medical condition which occurs when water accumulates in parts of the body] is reappearing, this so-called war dropsy, which is a consequence of a bad and overly watery diet. There are increases in stomach disorders and food poisoning, which are the result of eating spoiled foods. There are complaints of the appearance of scurvy, which is a consequence of an unbalanced and improper diet. From various parts of the Reich, reports are coming in about an increase in suicides…More and more often one finds ‘old age’ and ‘weakness’ listed in the official records as the cause of death; these are equivalent to death through hunger”.
Historical Interpretations of Great Inflation:
Traditionally portrayed as a catastrophe with damaging consequences that paved the way for collapse of Weimar Republic + rise of Nazism.
However a number of economic historians have perceived issue differently.
Historian C.L. Holtfrerich, writing in 1980s, maintains that in years up to end of 1922, Weimar’s economic policy amounted to a ‘rational strategy…in the national interest’.
His interpretation is that, by not reducing the budget deficits, Weimar Republic was able to maintain economic growth + increase production.
He argues that German economy compared favourably with other European economies that also went into recession in 1920-1:
i) Low unemployment: Whereas Britain’s unemployment rate was 17% in 1921, Germany had nearly full employment.
ii) Rising wages: real wages of workers increased between 1918-22.
iii) Growing foreign investment: Foreigners’ capital, particularly from the USA, provided important stimulus to economic activity.
iv) Industrial production: Nearly doubled from 1919-22, albeit from low base b/c of war.
Holtfrerich doesn’t accept policy was a disaster → in fact, he sees it as the only way that could have ensured the survival of the Weimar Republic; he argues that in early years of 1921-2 any policy that required cutting back spending would have resulted in most terrible economic + social consequences, and perhaps even the collapse of the new democracy. In this sense the inflation up to 1923 was actually beneficial.
This interpretation remains controversial → Holtferich has been criticized for drawing an artificial line at 1922 – as if the years up to 1922 were those of modest and ‘good’ inflation, whereas year 1923 marked start of hyperinflation with problems arising from that date.
Seems a rather doubtful way of looking at overall development of Great Inflation, bearing in mind the long-term build-up + nature of causes. It also tends to separate inflation from drastic measures that were eventually required to solve it.
Finally, an assessment of the Great Inflation must consider other important factors, such as social + psychological. There is always a danger to economic historians to rely largely on a study of economic and financial data.
Summary:
In immediate post-war years, German economy, in common with economies of all countries involved inn war, had to adjust from wartime to peacetime conditions.
After such a long + damaging conflict, transition bound to be difficult.
In some ways, German govts. coped well with change as unemployment kept low in 1921-22 when other countries, in particular Great Britain, were experiencing a severe post-war depression.
Nevertheless legacy of war + defeat left Germany with serious debt.
On top of this, large reparations payments demanded by Allies added to Germany’s economic difficulties.
Price inflation, largely due to govts. printing more and more money to close the gap between revenue + spending was constant feature of these post-war years.
By 1923 inflation spiraled out of control + brought chaos to millions of Germans.
