Hyperinflation affected the German Papiermark, the currency of the Weimar Republic, between 1921 and 1923, primarily in 1923. It caused considerable internal political instability in the country, the occupation of the Ruhr by France and Belgium, and misery for the general populace.

1. DEPTH STUDY
WEIMAR REPUBLIC
HYPERINFLATION
05

2. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
HIGH INFLATION+PASSIVE
RESISTANCE=HYPERINFLATION
Germany was already suffering from high
levels of inflation because of the war and
the increasing government debt.
‘Passive resistance’ in the Ruhr (after the
invasion) meant that whilst the workers
were on strike fewer industrial goods were
being produced, which weakened the
economy still further.
In order to pay the striking workers, the
government simply printed more money.
This flood of money led to hyperinflation
as the more money was printed, the more
prices rose.

3. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
LOSS OF CONFIDENCE IN THE CURRENCY
The knowledge that the future prosperity of
Germany would be sucked dry by heavy
reparations payments (to France and
Belgium) as per Treaty of Versailles, led to a
loss of confidence in the German currency.
Since the First World War, the value of
German money had been falling, meaning
that prices rose as money lost its value.
During 1923, with almost no wealth being
created in Germany, the currency became
worthless.
As demand for things went up and supply of
those things dried up, prices rocketed

4. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
DAILY EXPRESS STORY – FEBRUARY 1923
A Berlin couple who were about to
celebrate their golden wedding received
an official letter advising them that the
mayor would call and present them with
a donation of money.
The next morning, the mayor arrived,
and solemnly handed over a total of 1
billion marks, which was the equivalent
to a half of a penny.

5. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
STUDENT STORY
A university student
remembered:
“Many inflation banknotes which
a few weeks before represented a
huge fortune were used after
October 1923 by hard-up students
as toilet paper”

6. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
ACTIVITY 1
1. Explain in your own words what
hyperinflation means.
2. Identify the important features in
the cartoon from Simplicimuss
Magazine (1923). The cartoon
shows a German woman drowning
in a sea of paper money, crying
“Bread, bread”. Explain why they
are included and what point is
being made about hyperinflation.

7. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
HOW WERE GERMANS AFFECTED BY
HYPERINFLATION?
Almost over night, the life savings of many
Germans became worthless, and they were
forced to sell their valuables to buy food.
Some workers were paid twice a day,
because the prices will raise overnight.
People paid on a monthly basis suffered
because these could not keep up with the
prices.
Pensioners, disabled people, the
unemployed and war widows lived on fixed
incomes. They always received the same
amount of money each week. These
incomes might have been fixed a few years
before and were now worth nothing. They
faced homelessness and starvation.

8. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY

9. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
SOME PEOPLE PROFITED
Not everyone lost out.
Large businesses or property owners profited from
hyperinflation.
They took out huge loans to buy property or invest in their
businesses, knowing that in a few months the repayments
would be worth almost nothing.

10. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
HOW WAS THE GOVERNMENT AFFECTED?
Hyperinflation undermined confidence in the democratic
government and increased discontent.
Many of the working classes supported communism, while many
of the wealthy wished for the return of the “good old days of the
Kaiser”.
Middle-class people and workers lost faith in the Weimar
Republic and the democratic system. If the republic could not
maintain public order and economic stability, then they would
take their votes elsewhere.
After the crisis was long gone, Germans were still terrorised by
the prospect of a new wave of hyperinflation. This was a scar
that never healed. When the next disaster struck six years later
(Great Depression of 1929), Germans listened to the one man

11. CAMBRIDGE IGCSE – DEPTH STUDY: GERMANY
WAS IT FAIR TO BLAME THE GOVERNMENT?
Hyperinflation undermined confidence in the democratic
government and increased discontent.
Many of the working classes supported communism, while
many of the wealthy wished for the return of the “good old
days of the Kaiser”.
Middle-class people and workers lost faith in the Weimar
Republic and the democratic system. If the republic could not
maintain public order and economic stability, then they would
take their votes elsewhere.
After the crisis was long gone, Germans were still terrorised by
the prospect of a new wave of hyperinflation. This was a scar
that never healed.