1923: Invasion of the Ruhr and hyperinflation
Why is 1923 known as a "year of crisis"?
Germany’s government had already been bankrupted by WWI. The Treaty of Versailles made things worse: it took away wealth-earning areas like the Saar coalfields and made Germany pay £6.6 billion in reparations.
The invasion of the Ruhr
- Germany paid its first reparations payment in 1921, but couldn’t afford the 1922 payment.
- The Treaty gave the Allies the right to take what was owed in raw materials. In January 1923, France and Belgium invaded the Ruhr, Germany’s main industrial area, to take goods and their payment by force.
- The Weimar government told the workers to use passive resistance: they went on strike and refused to make the goods the French and Belgians wanted. They sabotaged factories and flooded mines.
- The French and Belgians reacted with violence, shooting some Germans and expelling others. France brought in its own workers.
- The government kept paying the striking workers, but had no money coming in from the Ruhr, so it fell into serious debt.
The problem of printing money
The government supported the strikers by printing more money to pay them. This got out of control:
- The government prints more money and gives it to people
- Businesses realise there is more money around, so they put up their prices
- The government prints even more money to help people pay
- Businesses put prices up again... and repeat
Prices rising out of control like this is called hyperinflation.
Key figures
| 1919 | $1 = 9 marks |
|---|---|
| 1923 | $1 = 200 billion marks |
| An egg | 80 million marks |
| A glass of beer | 150 million marks |
| A loaf of bread (November 1923, the worst month) | 201,000,000,000 marks |
The impact of hyperinflation
| Losers | Winners |
|---|---|
|
|
- Short term - food shortages; prices changed so fast they could rise while you queued
- Long term - people lost trust in the Weimar Republic and questioned whether it was fit to rule; extremist groups blamed the government; crime and poverty increased
The currency eventually became worthless, and many people blamed the weakness of the Weimar Republic for the crisis.
Question tip
Hyperinflation is an example of the economic problems the Weimar Republic faced in 1923. If you get a question on its political and economic problems, you can discuss:
- Political problems/weakness: Weimar Constitution, Treaty of Versailles, invasion of the Ruhr
- Political violence: Kapp Putsch, Spartacist Uprising, political assassinations
- Economic problems: reparations and hyperinflation
Remember how they link: reparations led to the invasion of the Ruhr, which led to hyperinflation.
For the 8-mark question "In what ways was Germany affected by the hyperinflation crisis of 1923?", write 2 PEE paragraphs, each on a different way Germany was affected, focusing on change from before.