Explain how Germany suffered from social and economic problems up to 1923 and how it had begun to recover by the end of 1924.

         The Weimar Government ordered passive resistance and told the workers in the Ruhr to strike but still get paid. This resulted in over 100 strikers being killed and 15,000 being evicted from their homes as punishment. As nothing was being produced in Germany during this time, there were no supplies to be exported to other nations. The government was running out of money but still need to pay the workers so they decided to print more money to give to the workers. As more money was being spent the prices in shops increased. To solve this, again, the government printed more money so as people could afford to buy food and other necessary supplies. The shops responded to this by raising their prices again. This cycle was repeated and soon what was a 0.29m loaf of bread now cost 32,428,000,000,000m! This was known as hyperinflation.

         The value of money started to decrease quickly and soon money was worthless. This affected a lot of people badly as they may have been on a fixed income, pension or maybe living off live savings. People starved and died as they could no longer afford to buy the essentials they needed to live. There were few advantages of hyperinflation but one advantage was easy repayment of loans and mortgages. Loans are fixed so cannot rise as the value of the mark decreased. People were easily able to pay off any debt they may have had. Germany became a barter economy with people trading things they owned like baskets or pots in exchange for food or service in return.

          In August 1923 Ebert powered under Article 48 formed a new government, he made Gustav Stresemann chancellor. Stresemann was Germany’s saviour. He ended a stop to passive resistance and sharply ended government spending. He agreed Germany would keep paying reparations to their allies as it was the best way in his opinion to get the French and Belgian troops out of the Ruhr. Gradually the economy started working again and Stresemann created a new bank named the Reichbank and new currency named Rentenmark.

       The economy was working its way back up again and in 1924 Stresemann became Germany’s new Foreign Minister. He signed the Dawes plan that year agreeing that Germany would pay the exact amount of reparations owed but they now had a longer time to do it.