Economic Problems in Germany 1918-1919

710 Words3 Pages
Explain why Germany was bankrupt by 1923. At first, Germany’s main problem was that its government was bankrupt. The cost of the war was so great that that all of the German gold reserves had been put towards the cause. After the Weimar Republic had made the decision to surrender, The Treaty of Versailles had made things considerably worse. It deprived Germany of wealth-earning areas, such as the coalfields in Silesia. As well as this the treaty also imposed harsh reparations on Germany (£6,600 billion). Germany asked for reductions however the victors, especially France were not forgiving and needed money to pay debts to the US. With no gold reserves and a failing income Germany could no longer afford to pay and declared itself bankrupt. Why was the Ruhr occupied and what were the consequences? The Ruhr was occupied because the Germans had failed to pay reparations to France and Belgium soon after the assassination of Walter Rathenau. French and Belgian soldiers marched into the Ruhr in early 1923 and expelled German officials whilst demanding payment. It is clear that one incentive to occupy the Ruhr was to reclaim the land that once had belonged to the French before the Franco-Prussian War. For Germany the main consequences were that they lost raw materials, manufactured goods, raw materials and precious mining land. Instead of using force, the government told the workers to resist peacefully and show the French and Belgian soldiers they were unwelcome. This was known as passive resistance. Another consequence to the occupation was that many former soldiers, such as Hitler, saw passive resistance as surrender and though that force from the German army was needed to evict the invaders. The occupation of the Ruhr lead to a shortage of goods and increased both Germany’s debts and unemployment rates. Outline the key details regarding the inflation
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