Topic 3- Economic and Social Problems, 1919-1924

A. Debt and Rising Prices

B. Occupation of the Ruhr

C. Social impact of hyperinflation

D. Political effects:

E. Welfare Support:

German gov refused to raise taxes as it would make them more unpopular

also wanted to increase spending on veterans, widows and children- national debt stayed high

large reparations made situation worse

most likely why govt were happy for prices to rise (inflation reduces debt)

Reparations:

A committee set German reparations at £6.6 billion in 1921

Wirth began policy of fulfilment

however in march 1922, gov asked for a suspension of payment

Ruhr contained 85% of German coal and a large amount of its steel

60,000 French/belgian soldiers occupied the Ruhr in Jan 1923, as few monthly payments were made in 1922

all mines, factories, steelworks occupied by troops, with a further 40,000 joining the Ruhr

Cuno a financial expert (non partymember) had become chancellor and ordered passive resistance- SPD refused to join coalition

workers were promised they would still be paid, while nationalist paramilitary fought a guerrilla war against France (who responded by deporting 150,000 germans from the area)

tensions were high, 132 civilians were shot including a 7 year old boy

despite France bringing in its own workers, production fell 80%

Effects of occupation:

paying the wages of striking workers drained treasury

taxes from striking workers were lost, businesses closed in the area

Germany had to import coal

shortages of goods pushed prices up

money lost all value

hyperinflation led to a loaf of bread costing 163 marks in jan 1923, and 233 billion in Nov 1923

Winners:

Losers:

those with debts saw them wiped out

those paying mortgages and rent gained

foreigners in germany did well and those Germans that possessed foreign currency

farmers coped as food always stays in demand regardless of price

those with savings saw them wiped out

those on fixed salaries and pensions struggled

landlords relying on fixed rents by contract were ruined

businesses struggled to set prices at a level consumers would buy at

the reputation of pro-republic parties suffered further- SPD refused to join Cuno coalition of Experts

Extreme parties gained

further communist rings in the Ruhr

the growing nazis, attempted to seize Munich in a putsch

a significant minority lost faith in democracy

the Weimar govt was a loser, having to be saved by Stresemann

SPD and many centre politicians wanted a freer and better life for germans

new constitution had given them greater rights than ever

but it does not put food on the table, so the constitution guaranteed work or welfare support- but was made for by printing more money

1919= maximum working day of 8 hours

1919= benefits for non working women and disabled

1919= aid for disabled veterans and pensions for war widows increased

1922= secondary schooling made compulsory and introduction of social workers to protect vulnerable children