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What challenges did the Weimar Republic face? - Coggle Diagram
What challenges did the Weimar Republic face?
Hyperinflation
Hyperinflation is when prices go up ten, a hundred times or even more in a short space of time
Positives of hyperinflation
Borrowers, such as businessmen, landowners and those with mortgages, found they were able to pay back their loans easily with worthless money.
To deal with reparations and the Ruhr crisis the government simply printed more money. It seemed an attractive solution to paying off its debts
People on wages were relatively safe, because they renegotiated their wages every day.
Negatives of hyperinfaltion
When a government prints too much paper money it then looses value very quickly, causing rapid rises in prices
Poor people suffered, but the greatest casualties were the richer Germans – those with savings. Savings that might have bought a house in 1921, by 1923 would not even buy a loaf of bread!
This caused huge issues with so much money in circulation, prices and wages rocketed, but people soon realised that this money was worthless.
Ruhr Crisis
The French did not believe that Germany could not pay so invaded and took over the area, to make the money up themselves.
French and Belgian troops occupied the area as a result of Germany not paying their second instalment of reparations.
German government order the workers not to obey any of the orders given by the occupiers (passive resistance).
Over one hundred men died as a result of this, and many lost their jobs as they refused to work anyway.
Ruhr Crisis continued...
Weimar government 1919-1922
January 1921 ~ 65 marks to the dollar
July 1922 ~ 493 marks to the dollar
Weimar governments faced with shortages and having to pay reparations decided to print more money
French occupation of the Ruhr
They also took coal and iron and steel as payments
The German workers decided on passive resistance. January 1923 ~ 17,972 marks to the dollar
The German government was unable to make its reparation payments in 1922. France and Belgium retaliated in january 1923 by sending soldiers to occupy Ruhr industrial area of Germany.
First World War
1914 ~ 4 marks to the dollar
government began to print more money to pay for the war
1919 ~ 9 marks to the dollar
Passive resistance
They also had to pay the striking Ruhr workers so printed even more money
November 1923 ~ 4.2 billion marks to the dollar
This meant that the government lost money from the production of coal, iron and steel.