How Did the Kaiser finance the war and what did this lead to
Increased borrowing but mainly printing more money
Led to increased gov debt and falling value of currency
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Weimar debt by 1919
1.44 billion marks
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Why couldn't Weimar increase taxes or reduce gov expenditure to pay back the debt
It would alienate support for the Republic
Civil servants had to be paid and they even increased welfare benefits to avoid being further hated by their people (however military expenditure was significantly reduced)
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Unemployment by 1921
1.8%
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Iejat happened to prices between 1918 and 1920
Prices had doubled between 1918 and 1919, quadrupled between1919 and 1920, 14 times higher than in 1913 (pre-war)
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Why were prices allowed to rise unchecked
Political reason: the coalition government in power, led by Centre Party, was supported by powerful German industrialist who benefited from inflation as they could take short term loans from Germany's central bank to expand their business and by the time
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Early problems regarding reparations
January 1922, Germany in such economies difficulty that the Reparation Commission granted a postponement of the January instalment
July 1922, Germany requested another postponement
November 1922, Germany requested a loan of 500 million gold marks and to
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Why was it hard to pay reparations in coal
Germany lost a lot of its coal reserves Iethr ToV like the Saar Fields which was given to France (technically under control of LofN)
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Why couldn't it pay in Manufactured goods
workers in Allied countries saw it as a threat to their jobs and businesses
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Why couldn't Germany increase exports
their merchant fleet was confiscated due to the Treaty and the high tariffs placed on German imported goods
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So how did Germany pay reparations
Printing money, working inflation and devaluing money
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Why did France and Belgium invade the ruhr, what was their aim
By late 1922, Germany was behind in its reparations payments so France and Belgium sent 60,000 troops to the ruhr area to take their worth of reparations in industrial output, steel and coal
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What did the operation grow to by 1923
And what did they do
100,000 soldiers
Took control of mines, factories, steelworks and railways
Soldiers demanded food and shelter without paying, set up machine gun posQts in the streets
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Cuno's response
Passive resistance: People living in the area would not cooperate with the French authorities
Workers told to go on strike, but were continued to be paid by the government
Paramilitary groups working with the government sabotaged the French occupation, b
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What did this do to the French operation
Grew in size The French set up military courts, punished, mine owners, miners and civil servants who would not comply with their authority
150,000 Germans expelled from area
Some miners **** after clashes with police
132 Germans shot within 8 months
Fr
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How did the ruhr act as a catalyst to hyperinflation
Paying the wages of striking workers amd lost Tax revenue further drains gov resources. Germany had to import coal and pay for it from the limited foreign currency reserves within the country. Shortage of good push prices up further.
these costs amounted
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Some impacts of hyperinflation
Food shortage as speculators hoarded food
Gangs if city dwellers went to countryside to take food from farms
Food riots whwn crowds looted shops
Bartering system develops
Increase in theft
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Social welfare system in Germany
In 1919 state health insurance, insured by Bismarck was extended to include the wives and daughters of workers, as well as a disabled
In 1919, aid for war widows and orphans was increased. The national government took over the responsibility of giving aid
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How was all this welfare funded
Printing money, worsening hyperinflation
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Winners of hyperinflation
Black marketeers who bought up food stocks and sold them at inflated prices
People who had debt mortgages or loans
Enterprising businessmen took out loads which would be worthless the next day
Farmers who had a lot of demand so had high prices
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Lovers of hyperinflation
Those on fixed incomes like pensioners
People who lent money to gov during war through fixed rate war bonds
Working class whose wages did not rise with inflation
The middle class 'Mittlestand' lost all their savings
Artisans and amall business owners
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What did losing middle class support mean for weimar
They lost the support of the class they relied most on for support. The MC were joking extreme groups instead
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Other cards in this set
Card 2
Front
Weimar debt by 1919
Back
1.44 billion marks
Card 3
Front
Why couldn't Weimar increase taxes or reduce gov expenditure to pay back the debt
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