2. Today’s lesson – Hyperinflation
We are developing our knowledge and understanding of
the Hyperinflation crisis that took place during 1923.
By the end of today’s lesson I should be able to:
1) Describe events during the 1923 Hyperinflation crisis
2) Explain why hyperinflation caused problems for the Weimar
Republic.
Today’s lesson involves:
Note Taking
N5 Level Question
3. Problems facing the Weimar Republic
The newly formed Weimar Government
faced numerous economic problems one of
the most famous being the 1923
hyperinflation crisis.
The crisis stemmed from the fact that
Germany had to pay reparations as a result
of the Treaty of Versailles.
Germany had to pay £6.6 billion to allied
countries.
So what do you think the problem was?
4. Video Task
https://www.youtube.com/watch?v=nE8Bw7Se1NU
Watch the following video and answer the 3 detailed questions in your
jotter to give you a brief introduction to the topic
1. What was the economic situation in Germany following WWI?
2. Why was the French and Belgian occupation of the Ruhr region so
disastrous for Germany?
3. What is hyperinflation? Why was there hyperinflation in Germany?
And, how did hyperinflation affect regular everyday Germans?
5. Discuss: Do you think the allies
were correct in invading the
Ruhr?
6. Government’s reaction to Hyperinflation
When the French and Belgium forces invaded the Ruhr to take
their ‘payment in kind’ - the German workers did not fight
back in fact the Government wanted the workers to work with
the allies.
Ruhr workers, enraged by this went on strike. However the
Weimar Government kept paying them by simply printing
more money.
This led to an economic phenomenon known as
Hyperinflation.
8. Task 2
Look at the following two pictures and write a description for each:
9. Problems caused by Hyperinflation
The problem was the fact the more money the Government printed the
less valuable that German money became.
The impact of hyperinflation was absolutely devastating for instance:
At the start of World War One, the exchange rate was roughly four
German marks to one US Dollar.
By 1923, the rate was 4 billion German marks to one US Dollar.
Money therefore became worthless.
10.
11. Problems caused by Hyperinflation
Since money became worthless very quickly, Workers rushed
from being paid to quickly buying food before it became too
expensive.
People would burn money instead of firewood, use money to
wallpaper their house or get children play with it like a toy.
Many Germans saw the value of their life savings completely
wiped out. Germans on fixed incomes (such as pensioners)
could not afford to pay for things, and often starved, became
homeless or could not heat their homes.
12. Problems caused by Hyperinflation
A barter economy developed, where people would swap
things or provide services in exchange for food or other goods.
However some Germans did benefit from Hyperinflation,
letting them quickly pay off loans or mortgages.
13. Why did this lead to the rise of the Nazis?
Germans blamed the problems on the Weimar
Government and turned to other groups for leadership.
Working class Germans turned towards the Communist
parties. Others wished for a return of a strong, Kaiser-
style government and supported groups like the Nazis.
However Hyperinflation did end by 1923 when
Germany introduced a new currency the Rentenmark –
this quickly ended the crisis.
However many Germans were still angry at the effects
of hyperinflation and wanted change.
14. National 5 level questions
Source A: ‘Workers were paid twice a day and when they were given their wages, they
threw bundles of banknotes out of factory windows to waiting members of their
family who would then rush to the shops to buy food or coal or clothes before the
prices went up. Millions of people faced starvation due to hyperinflation. People such
as pensioners who were living on fixed incomes found that prices rose much faster
than their earnings.
Source B: ‘Almost overnight the life savings of many Germans became worthless.
Some workers were paid twice a day and could spend their ages instantly. People who
were paid monthly or depended on savings suffered because they could not keep up
with the price rises. Pensioners lived on fixed incomes. They always received the same
amount of money each week. These incomes were now worth nothing. They faced
homelessness and starvation.
Compare the views of Sources A & B on the effects of hyperinflation on
the people of Germany – 4 marks.
