Reparations

Reparations Repayments

Reparations repayments led to the German economy becoming devalued. Having to pay such large sums to the Allies resulted in the German economy having a rapidly reduced capacity to purchase goods, as they were compelled to give much of their accumulated wealth and produce to the Allies in part payment towards the Reparations bill. The level of reparations Germany had to pay was set out in the Treaty of Versailles.

This had several consequences. First, it resulted in the value of the German currency falling. The table above illustrates how rapidly this happened. Second, it resulted in the cost of items within Germany rising as the relative cost of importation rose as the value of the currency declined. This is inflationary in nature and has several consequences. In situations such as this people make use of their savings, as they cannot afford to make purchases using only their weekly or monthly income. In Germany billions of dollars worth of hoarded and saved marks re-entered the economy in the period after the war. Again, this results in inflation rising and the value of the currency falling when compared to other currencies. Combined, these factors lead to a cycle of devaluation and inflation that can, and did, become hyperinflation.

It is not however the case that the economy within Germany continued to decline throughout the whole of the period 1919 – 1923. In 1920 the currency stabilised for a period of some 6 months. The price index remained almost constant and the value of the German mark remained at approximately 1US$ to 69 German marks. The Weimar Government, it has been argued, could have introduced a stable currency at this point. Instead they continued to increase the amount of money in circulation – which is inflationary. The result was hyperinflation in 1923. This had massive consequences for the economy and society in general.

http://www.usagold.com/GermanNightmare.html

This link includes an outline of how peoples investments were affected during this era. It notes that in general people would have lost the value of their investments – with one or two areas that proved to be the exception: Investment in Capital (Land and Buildings) and Investment in Foreign currency.

 

Weimar Germany Lessons and Teachers Resources

Rise of Hitler revision chart 1-9 GCSE Exam Preparation. Usefulness of Sources: the SA and Nazi methods of control.
Revision exercises@ Life in Nazi Germany 1-9 GCSE History Revision Guide Weimar and Nazi Germany
Teaching resource: How did the Nazi’s rise to power?

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Weimar Republic

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Weimar Constitution 1919-1923: Years of Crisis?
Spartacist Uprising Kapp Putsch
The Munich Putsch Hyperinflation in Germany, 1923
Reparations Did the Economic Crisis of 1923 help the Nazi’s?
Origins of the Nazi Party 1924-1928: A Golden Era?
Gustav Stresemann German Foreign Relations 1919-1932
Germany in the Great Depression Rise of the Nazi Party
Failings of the Weimar Republic Totalitarian Regime in Nazi Germany
How did Hitler consolidate power? Mein Kampf
Nazi methods of control Opposition to the Nazi Regime
Organisation of the Nazi Party Fuhrerprinzip
Kristallnacht Youth and Education
Goering and the 2nd 4 Year Plan Anti-Jewish Boycott, 1933
Nazi Anti-Semitism DAF (The German Labour Front)
Propaganda in Germany 1919-39 Economic Policy of the Nazi Party
Weimar Germany Our sister site provides in depth coverage of many aspects of life in Germany at the time of the Weimar Republic
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Lesson plans, resources and ideas on Nazi Germany A range of lesson plans, teaching resources and links of use in the classroom
Economy under Nazi rule Articles, Resources and Documentation relating to the Economy under Nazi rule
The Holocaust History Teachers’ Resources

Revision Diagrams

Was the Weimar Republic Doomed from the outset? To what extent did Germany recover under Stresemann?
The Nazi Party up to 1929 How did Hitler become Chancellor of Germany?
Who gained from Nazi rule?

Revision Diagrams

Was the Weimar Republic doomed from the start? |To what extent did Weimar recover under Stresemann?
How did the Nazi Party develop up to 1929? How did Hitler become Chancellor?
How did Hitler become Chancellor? How did the Nazi’s create a Totalitarian State?