• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

What were the causes of the German hyperinflation of 1923 and what were its economic, social and political consequences to the end of 1923?

Extracts from this document...

Introduction

What were the causes of the German hyperinflation of 1923 and what were its economic, social and political consequences to the end of 1923? The German hyperinflation of 1923, which effectively provided the extreme right with a medium to seize power, arguably had its roots within Germany's inability to meet the clauses drawn up in the Treaty of Versailles, which the French were keen to vigorously enforce. Significantly the turmoil was also one of Germany's own doing and coupled with her refusal to comply with the Allies demands, the causes of the hyperinflation can be categorised in to either long term reasons, the fact that Germany was unable realise its commitment to repay loaned 'War Bonds' and secondly from the burden of the unworkable reparations bill, or into the short term factor of 1923 which saw the impact of the French invasion of the Ruhr lead to the economically crippling action of 'passive resistance'. The German hyperinflation itself had widespread and devastating consequences for Germany's economic, social and political climate and perhaps most significantly hit the middle class who, after suffering the loss of their money which had been tied up in banks and pensions, lost faith in the Weimar Republic and ignoring the 'red menace' of the Communist threat, unlike they had previously done in 1919, swayed towards the extreme right in search of a reactionary monarchist party who operated in similar fashion to that of the now disbanded but not forgotten Kaiserreich. ...read more.

Middle

Within six months a single dollar amounted to around five million German marks and again the government responded by incompetently printing more paper money. Between the months of September, October and November 1923 there was a spike in the hyperinflation rate and a 'J' curve effect noted. The dollar was now worth around four billion marks and famously there were reports of the now worthless currency being used to fuel household stoves. The German economy had completely collapses, to the extent that under Stresemann the policy of 'passive resistance' was abandoned, the damage however was already devastating. The effect of the German hyperinflation had a devastating economic impact. Significantly the value of the German mark completely collapsed and lost all international recognition. The descent of the currency into worthlessness was worsened by the effect of the 'J' curve which ensured that that the rate of inflation was accelerating which therefore ensured that little could be done to halt its rapid increases, indicated by the fact that by November 1923 workers were demanding pay twice in the working day as to ensure that they could buy as much as possible before they suffered another rise in prices. Although the effect had occurred over several years by the end of 1923 it had spiralled out of control and had reached a point where financially Germany was almost beyond the point of return. Furthermore Germany also witnessed the flight of foreign investors from the mark and this itself had serious implications for Germany who was forced to pay exorbitant amounts for food imports, with the Allied blockade seriously affecting Germany's ability to deal with the rest of the world. ...read more.

Conclusion

Moreover the French occupation of the Ruhr inflamed nationalist feelings within the population, spurred on by rightist propaganda relating to the French use of black colonial troops, much of the German population was left outraged by the French actions and more importantly by the fact that the Weimar Republic would not forcefully defend itself. The Krupps incident and the murder of Schlageter, who was portrayed as a National hero, did little to ease tensions. Furthermore by August, the Stresemann lead government called of their policy of 'passive resistance' and importantly the extreme right used this opportunity to accuse the Weimar government of not acting against the French but instead allowing the French to remain in German territory. Levels of support for the extreme right had grown substantially and by September 1923 leading figures such as von Seekt, Ludendorff and Stinnes were contemplating a takeover of power. The series of events however ended in turmoil, due to the fiasco of the Beer Hall Putsch of 1923; where quarrelling amongst the right lead to the catastrophic defeat for Hitler's NSDAP and saw power remain in the hands of the Weimar Republic. In conclusion it can be observer that German hyperinflation itself has its origins within the First World War, notably the period of acute inflation was one of Germany's own doing through the policy of 'passive resistance'. Appreciably the fall out of the inflation was widespread, with the economy crippled and growing tensions between the classes resulting in a rise in support for both the extreme left and right. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Modern European History, 1789-1945 section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Modern European History, 1789-1945 essays

  1. The main threat to the stability of the Weimar Republic in the period 1919 ...

    and the government, their leaders Liebknecht and Luxembourg were quickly murdered and the revolution crushed. The same occurred when socialists led revolts in Bavaria and Ruhr and so we can see that the extreme left never posed a significant threat to the stability of the Weimar Republic as they were always a threat easily dealt with.

  2. Assess the economic, social and political consequences of the collectivisation of Russian agriculture in ...

    Furthermore, Stalin portrayed them as controlling the food supply and exportable grain reserve of the state, whilst also hoarding food for their own consumption, and thus not complying with the new rules imposed by collectivisation (Lewin 1966 p200). Stalin therefore declared that collectivisation eventually would end their monopoly and thus

  1. To what extent was German Unification driven by primarily economic forces?

    Why is this? It is because Bismarck was in a strong position when he came to power in 1862 and the reason he was in a strong position was because he had inherited a powerful and growing economy, this is why an ordinary person would not have done significantly worse because the resources were already there.

  2. Hitlers Germany

    Others are solid mixtures of concrete and glass or cinderblock-functional, durable, and unimaginative. The cities are hybrid. The Hochh�user-the semi-skyscrapers-are likely to stand in no sensible relationship to the architecture around them. Where there were so many wide fields of blasted stone, new buildings sprouted one at a time, or

  1. How far were long term causes more important than short term causes in the ...

    to get the politics back to the right after there was a major move of politics to the left and consisted of the appointment of Vielle as chief minister, the reintroduction of press censorship and the electoral system was changes again.

  2. Hindenburg and the Causes of Mullers government collapse.

    It is in the constitution and the president can employ it whenever they fell necessary. Article was extremely important in the breakdown of politics because it undermines the whole system of democracy, where the country can be ruled by a dictator.

  1. Albert Speers Role as German Armaments Minister during the War

    But Hitler disagreed with Speer?s plan and opted for an illegal roundup of foreign labourers to work in the armaments factories. The foreign workers were badly treated; they worked in appalling conditions, endured violence, illness and death. Speer?s role as Armament?s Minister during the war from 1942 to 1945, was

  2. The main threat to the stability of the Weimar Republic in the period 1919 ...

    It is clear that the Treaty of Versailles was met by bitterness and hatred from the majority of German people. One of the reasons for this was article 231, the war guilt cause, which put the blame of the war on Germany.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work