It’s 1923 and a goods shortage means that prices are rising like crazy.
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Revision Notes:
Inflation and hyperinflation
- goods shortages in early 1923 meant that prices went up - this is called inflation
- people had to pay more money to get what they needed
- government decisions made things worse
- the gov needed money to pay their debts but unemployment and failing factories meant they were getting less tax money
- 1919-23 gov income was a quarter of what was needed
- the gov resorted to printing more money
- 1923 gove had 300 paper mills and 2000 printing shops dedicated to printing more bank notes
- initially it made it easier to pay reparations
- but it made inflation worse
- vicious circle: prices rose more, more money printed, caused prices to rise again
- by 1923 prices where huge
- this extreme inflation is called hyperinflation
- price of a loaf of bread: 1919 1 mark, 1922, 100 marks, 1923 200 000 billion marks
the effects of hyperinflation
1) Normal Living became impossible
- printing presses couldn’t produce enough money
- people had to pin money to letters because stamps were useless
- they had to carry bundles of money in baskets and even wheelbarrows
- many workers were paid twice a day so they could rush out and buy goods before prices rose even more
- some shops refused to take money at all, asking for payment in kind (swapping goods)
- some people raided shops because they couldn’t afford food
2) Everyone suffered from shortages
- german marks became worthless for importing goods
- 1918 buying £1 worth of foreign goods cost 20 marks, by nov 1923, £1 worth of foreign goods cost 20 billion marks
- foreign suppliers refused to accept german marks for goods so imports dried up and shortages of food and other goods got worse for everyone
3) People with savings were hit hardest
- those with money in bank accounts, insurance policies or pensions had their saved money become worthless
- thus the middle classes were the worst affected
There were people who benefited from inflation
- people who had loans or took them out found that the value of the money they owed went down, e.g. some big businessmen borrowed money and profited because the value of their debts went down
- other people hoarded goods and then sold them for a large profit as prices went up
- foreign visitors also benefited, as the value of their own currency rose against the german mark, so they could buy much more with their money
- german people bitterly resented people who made money out of their suffering
the damage done
- after august 1923 a new chancellor gustav stresemann found solutions to some of the problems of 1923
- by this point however the political and economic turmoil from 1918 to 1923 had done its damage
- the WR was shown to be weak, it had been rescued by the freikorps in 1919 and workers striked in 1920, government forces had killed thousands of germans in order to stay in power
- all germans had suffered. most blamed the WR for their suffering, the middle classes which would normally be the bedrock of the republic suffered most
- extremist parties with private armies hostile to the republic had gained in strength
HOW I MODERATE COMMENTS
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SOURCES:
John Child, 'Edexcel GCSE (9-1) History Weimar and Nazi Germany, 1918-1939 (EDEXCEL GCSE HISTORY (9-1))' (Pearson, 2016) [ISBN: 9781292127347], pp. 23-24
It's a GCSE textbook, please don't use it for any serious academic writing!
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7 сен 2024
