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6 Cards in this Set
- Front
- Back
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How would Germany pay for the war? |
-Would fund the war through borrowing -printing more money (as opposed to raising tazes which would have only impacted businessmen or junker at most) -Relied on Germany winning the war. |
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what would be the impct of the war on Germany finance? |
-Germany defeat meant that they couldn'tppay back government bonds, and were left with 1.44bn marks in debt in 1919. -After the war, taxes weren't raised as to risk alienating support as anti-republicans would claim taxes were raised to pay reparations. -Government expenditure wasn't cut as civil servants weren't made redundant due to fragility of the republic. -yet german unemployment in 1921 would reach 1.8%, compared to 17% in the uk, which had encouraged investment from the USA, helping to lead a rapid recovery in economic activity. -However, the Reparations commissions report in 1921 concluded that germany would have to pay the 6.6bn in reparations. -Fehrenbach's cabinet would resign in 1921 due to the harsh terms and be replaced by Challoner Wirth -Economic difficulties led to 1922 postponement and even asked for a 500m mark loan, causing the french to become suspicious. -However, Reparations would only account for 2% of Germany's GDP |
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what was concluded in the Reporations commision's report? explain |
-1921 the Reparations commisions report concluded that the 6.6bn was to be paid in reparations |
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what were the causes of hyperinflation? |
1.Hyperinflation going unchecked -Political instability and fragility of the republic meant that the government were reluctant to reduce expenditure and cut taxes, leading to their only solution to print more money. -Fehrenbach's cenre party coalition would continue to allow hyperinflation to go unchecked due to the centre party's support from industrialists, who beenfitted from hyperinflation by taking short-term loans to expand their business. -Lessened government debt. -However, princes would rise, quadrulping between 1919 and 1920.
2.Reparations -Germany would have to party reparation with coal. However, Germany would loose a lot of its coal reserves, making it harder to pa reparations. -The allies didn't want Geramny manufacturing their own goods as the allies saw it as a threat to their own businesses. -Treaty of Versaille would lead to Germany's entire merchant fleet being taken away, resulting them in not being able to pay through increased export trade. -Would continue prinitng money.
3.Franco-Belgium occupation of the Ruhr -60k troops sent to the Ruhr in january 1923, taking conntrol of the mines, factories, to ensure that Germany would comply with the conditions of the treaty of versailles. -Chancellor Cuno would stop all reparation payments, demanding a policy of 'passive resistance'. French would not co-operate. -Economic impact: 1.Paying wages for strikers was a drain on finanaces 2.Lost tax revenue from businesses 3.Germany had to import coal, and pay for it from limit foreign currency reserves 4.Shortages of food drove prices for food up.
4. Social welfare -Politicans wanted to improve the Germany welfare system as to improve life for veterans of the war. -in 1919, state healthcare insurance system was extended to wives, daughters, disabled and aim was paid to war veterans, widows and orphans. -prinitng money was also largely to pay out to welfare benefits that the weimar republic was committed to providing. |
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what would be the social impact of hyperinflation? |
-prices of bread would rise from 163 marks in january 1923 to 233 by 19th november 1923 |
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Who would be the winners and losers of hyperinflation? |
Winners: -The middle class, those who had debts, mortgages or loans - Big businessmen such as Hugo Stinnes -Farmers coped well as there was a high demands for food, leading to an increasein price. losers: -Those who lent money to the government during the war. interest payments had decreased in value. -Unskilled workers wahes wouldn't increase, increasing unemployment. by the end of 1923, only 29% oof workforce was employed. -Shortages of food, would lead to people, especially children suffering from malnutrition, which would contract diseases such as rickets. |
