Post-war Problems in Germany (Hyperflation (Since no trade was being made,…
Post-war Problems in Germany
Germans felt betrayed
Their Kaiser had run away
The new government had to deal with political uncertainties, economic problems and a crisis in German society
Devastating flu outbreak that killed thousands of malnourished Germans
The bill of £6,600 million was announced in April 1921
Was to be paid in annual installments
2% of Germany's annual outpu
Germans protested that this was an intolerable strain on the economy, their protests were ignored.
The Invasion of the Ruhr
The 1st instalment (£50million) of the reparations was paid in 1921 but in 1922 nothing was paid.
The French were under pressure to pay back war loans to the USA so they lost their patience.
In January 1923, the French and Belgian troops entered the Ruhr to take the payment in the form of raw materials and goods.
The government ordered the workers to carry out a passive resistance but the French responded by killing over 100 workers and expelling over 100,000 protesters.
The halt of industrial production in Germany's most important region caused the collapse of the German currency.
Since no trade was being made, the government simply printed more money.
It paid off its debts in worthless marks, including war loans of over £2,200 million
With so much money in circulation, prices and wages rocketed
The people who were most effected people were prosperous middle-class families because their savings in the bank that would buy them a house in 1921, would only just cover the cost of a loaf of bread
In August 1923, a new government under Stresemann took over. They called off the passive resistance in the Ruhr and called in all the worthless marks to be burned. He replaced them with a new currency called the Rentenmark.
Stresemann also negotiated American loans under the Dawes Plan.
The hyperinflation gave right-wing opponents another problem to blame the government for, and the government had lost support from the middle-class.