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Hyper Inflation In Germany 1923 Essay

1454 words - 6 pages

Hyper- inflation in Germany 1923 was that of a huge blow to their economy and moreover, to their self-esteem. The value of the German mark became next to nothing, and people ended up having to trolley wheel-barrows full of money just to buy a loaf of bread. There are several causes for this happening in the first place, Germany had no goods to trade with the first place and they weren’t exactly on good terms with other countries to be in a position to do so. Then there was the severe impact of the treaty of Versailles that was “happily bestowed” upon them after the First World War. The French invasion of the Ruhr caused an uproar in the German government and it didn’t help in terms of ...view middle of the document...

This was all and bad for Germany but what we’re really trying to find out , is why this all happened? How could it have gotten this bad? Its questions like these which have been the turn for much conflict.
During the war there were several policies and law being upheld by the German second Reich that caused Germany to enter a political deadlock. The German government was headed by Kaiser Wilhelm at the time of the second Reich. He was referred to as a dictator or diktat and so before the war, Germany had no real democracy. His say was law basically and for a quite a while things were going well for Germany until the break out of the war. In 1918 the Kaiser refused a proposal for peace from opposing countries in return for a democratic Germany, this caused an outbreak of revolts, sailors in Northern Germany took over the town of kiel in protest. The Kaisers old enemies , “the socialists” led uprisings of workers and soldiers in the country and this did not contribute well to the economy and its trade was stifled as many protesting ports led to absent use of sea routes. The result of the war on Germany was another obvious factor for the inflation. The proud German army was defeated by opposing force during the war and from the impact of the treaty of Versailles. A major flu epidemic was spreading across the nation taking thousands of lives, and these included people who were already weakened by rations in the country. Politically wise too there was a major impact on old Germany, the introduction of the Weimar Republic. All these changes had a lasting effect on Germany and these all had an addition to hyper-inflation, the strikes-no trade, treaty of Versailles- loss of land and therefore resources and reparations.
Two points mentioned previously had a great influence on the extent of hyper-inflation. The major one was the treaty of Versailles. The treaty was viewed as harsh by the Germans and some of its consequences had that effect on the economy. Reparations caused the German government to allocate all their funds into paying the debt off. This proved to be virtually impossible as the sum asked for,6.6 billion pounds, was a massive amount. It was later reduced to around £2 billion, but not before it had inflicted a lot of harm. Reparations caused cutbacks to be taken on working peoples jobs and wages to be reduced. This raised unemployment levels and people became homeless and “lived on turnips and bread” also “the flour for bread was mixed with sawdust to make it go further”. No money was spent on the German public and therefore the economy sank. So when there was a national panic for money the government started to dish out loads and loads of printed notes. They saw this as a “smart solution” but it only ended up in worthless money circulating the businesses and once people realised this they had to ship in loads of notes just to buy groceries. Pensioners money was cut back and middle-class family savings was lost. Even with all...

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