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French Occupation of Ruhr (Negative Effects on Hyperinflation (Normal…
French Occupation of Ruhr
Germany's biggest problem - bankrupt
Treaty of Versailles - made things worse
Reparations + lost wealth creating areas eg coalfields. By 1923 - Germany didn't have enough money to pay reparations + send coal to France
France retaliated by sending troops into industrial area of Ruhr
Confiscated goods + machinery
Germans who resisted - arrested + replaced by French workers
Germans were very resentful of French, Weimar government didn't want anything to do with occupation
Occupation of Ruhr - crippled Germany + increased its debts, unemployment + food shortages
Inflation + Hyperinflation
Shortages = price increased
Government needed money to pay debts
Unemployment + failing business = received less money from taxes
Could not gain more money from taxes so government printed more money, helped pay reparations but made inflation worse
the more money was printed = more prices rose again
Negative Effects on Hyperinflation
Normal living became impossible
people blamed Weimar Republic, made it even more unpopular
Carry bundles in wheelbarrows
some people raided shops as could not afford essentials like bread
Everyone suffered from shortages
German marks became worthless for importing goods, forgein supplies refused to take money
some businesses went bankrupt
people that had savings (usually those from the middle class) were largely effected as money became worthless
Positive Effects on Hyperinflation
Not everyone suffered
People/businesses could pay off loans/mortgages
Farmers benefited, paid more for food
Rents for rooms/shops became very cheap
Foreign visitors could buy more with their money while visiting Germany
Why hyperinflation
1914-18: Government printed more money to pay for WW1, but didn't have more gold, bankrupt
1918-22: Weimar government printed more money for shortages from WW1 + and asked for a longer time to pay 1st lot of reparations
Jan 1923: French troops invaded Ruhr to take reparations payments in goods/raw materials
Jan 1923: German workers went on strike.
Jan 1923: 80% of coal, iron + steel reserves in the Ruhr/its factories
Occupation - disaster for Germany's economy
Nov 1923: German mark - worthless
Weimar Republic printed more money to pay strikers + make up for less iron, steel and coal production