2. The Weimar Republic: The Economy KNOWLEDGE CARDS

Question 1

What was Germany’s debt after the First World War?

Answer 1

150 million marks.

Question 2

How much (%) did living standards fall during the First World War?

Answer 2

Between 20% and 30%.

Question 3

What happened to the printing of money during the First World War, which led to inflation and the declining value of Germany’s currency (marks)?

Answer 3

It increased nearly fivefold, causing the value of the mark to decline by 75%.

Question 4

By 1924, what proportion of the German population was receiving state welfare (%), leading to a significant rise in government spending?

Answer 4

10%

Question 5

Under the terms of the Treaty of Versailles, what was the total amount of reparations demanded from Germany?

Answer 5

£6.6 billion

Question 6

In what form were Germany’s reparations payments made?

Answer 6

Payments were made in gold or “in kind” (e.g. raw materials), as these held their value against the declining German currency (which made the goods even more expensive for the Weimar government).

Question 7

What did the Weimar government do to attempt to manage their increased debt, and make the reparations payments?

Answer 7

They began to print more and more money, increasing the amount of marks in circulation and causing inflation to rise.

Question 8

When did the Weimar government fail to pay Germany’s reparations payments?

Answer 8

Early 1923

Question 9

How did France and Belgium respond to Germany’s failure to meet its reparations payments?

Answer 9

In January 1923, French and Belgian governments ordered an invasion of the Ruhr, a key German industrial region. Here, they seized Germany’s raw materials and goods.

Question 10

How did the Weimar government respond to the invasion of the Ruhr in January 1923?

Answer 10

They called for all German workers and business owners in the Ruhr to follow a policy of passive resistance and to go on strike.

Question 11

How did the crisis on the Ruhr increase the Weimar government’s debt?

Answer 11

1. Raw materials and other goods had been seized by French and Belgian troops, which could not be used by Germany for production/trade. They had to import these goods/materials.
2. After having called for passive resistance in the Ruhr, the German government paid the wages of workers who went on strike, and compensated owners for lost revenue, increasing their debt.

Question 12

What did the Weimar government continue to do after the invasion of the Ruhr to manage their debt?

Answer 12

They continued to print more and more money, increasing the amount of marks in circulation and causing inflation to rise significantly.

Question 13

What had happened to the Germany currency by mid-1923?

Answer 13

The currency had inflated to unprecedented levels (hyperinflation). By autumn 1923, it cost more to print a bank note than the note was worth.

Question 14

By December 1923, how many German marks were needed to buy $1?

Answer 14

4.2 trillion marks

Question 15

Identify two groups of people who suffered severely as a result of the hyperinflation crisis.

Answer 15

1. Pensioners and those on fixed incomes suffered heavily during the economic collapse. Their incomes completely lost value.
2. People’s savings in the bank also lost value.

Question 16

What was the name of the new temporary currency introduced in Germany in October 1923?

Answer 16

The Rentenmark

Question 17

What was the name of the new permanent currency introduced form August 1924?

Answer 17

The Reichsmark

Question 18

What was the result of the currency reform after the hyperinflation crisis?

Answer 18

1. It restored faith in the German currency, both at home and abroad.
2. Prices began to settle.

Question 19

What else did the Weimar government do to stabilise the currency after 1923?

Answer 19

They used emergency decrees to control rents, wages and prices.

Question 20

What was the name of big businesses which joined to set and control prices?

Answer 20

Cartels (e.g. I.G. Farben)

Question 21

How many cartels were there by the mid-1920s?

Answer 21

2500 cartels

Question 22

By 1925, how much had the production of Germany’s chemical industry increased by (from 1913 levels)?

Answer 22

Approx. 30% more (this had risen further to around 65% by 1930).

Question 23

By how much did exports rise between 1925 and 1929 (%)?

Answer 23

40%

Question 24

What happened to wages every year between 1924 and 1929?

Answer 24

They rose.

Question 25

What two plans were negotiated with the USA to make reparations payments more manageable and to provide loans to rebuild Germany’s economy?

Answer 25

The Dawes Plan (1924)

The Young Plan (1929)

Question 26

How much money was loaned to Germany between 1924 and 1930?

Answer 26

25.5 billion marks

Question 27

Identify three pieces of evidence that suggest a limited economic recovery during the “golden years”.

Answer 27

1. Although Germany’s export trade did improve, the value of imports always exceeded that of exports. Heavy tariffs had been placed on German exports following its role in the First World War.
2. The agricultural sector was sluggish during the “golden years”, and was in recession from 1927.
3. The Weimar government did not increase rates of taxation, which could have been used as a source of income for the country. Instead, the government resorted to borrowing more money causing the economy to be kept afloat by government support and foreign loans.

Question 28

What event in America in October 1929 triggered the collapse of the German economy?

Answer 28

The Wall Street Crash

Question 29

How did the Wall Street Crash affect Germany?

Answer 29

America recalled foreign loans from abroad, and stopped paying out loans to Germany.

Question 30

How much did national income fall between 1929 and 1932 (%)?

Answer 30

39%

Question 31

How much did industrial production fall by between 1929 and 1932 (%)?

Answer 31

Over 40%

Question 32

How many German businesses went bankrupt after 1929?

Answer 32

50,000 businesses

Question 33

How many major German banks collapsed after 1929?

Answer 33

5 major banks

Question 34

What proportion of people were unemployed by 1932?

Answer 34

One-third

Question 35

By how much did wages fall by? (%)

Answer 35

Between 20% and 30%

Question 36

What policies did Chancellor Brüning adopt to try and tackle the economic crisis after 1929, which did not work?

Answer 36

1. Deflation: reducing the prices of goods and services to reduce government spending.
2. A reduction of state expenditure: Brüning used an emergency decree to introduce wage cuts, rent cuts and tax rises.

Question 37

What other ways of dealing with the crisis (1929-1932) were put forward to Chancellor Brüning, but ignored?

Answer 37

1. A plan for job creation, as had happened in the US.

2. Devaluing the Reichsmark to make German goods cheaper and to increase demand for these goods abroad.