The Weimar Crisis of 1923

The year the money died

In 1914 an American dollar bought about four German marks. In January 1923 it bought about 18,000. On 15 November 1923 it bought 4,200,000,000,000. Between those two dates of 1923 the German currency stopped meaning anything: wages were paid twice a day and spent within the hour, and a lifetime of savings would not buy a loaf. It did not happen by accident. It began on 11 January 1923, when French and Belgian troops marched into the Ruhr to take by force the coal and timber that Germany had stopped delivering as reparations, and it was made certain by the way the German government chose to answer them. This module follows that chain from Versailles to the Rentenmark, with the figures at each link, and then shows how the chain becomes a 12-mark answer and how the sources of 1923 are used in the 4-mark and 8-mark questions.

Five words the examiners use

Each definition ends with a date or a figure, because on this paper a term without support earns nothing.

From the bill to the new money

Put these six links of the chain in the order they happened.

• The Allies set the reparations bill at 132 billion gold marks
• Germany falls behind on deliveries of coal and timber
• French and Belgian troops march into the Ruhr
• Gustav Stresemann becomes Chancellor at the head of a coalition
• Passive resistance is called off and deliveries resume
• The Rentenmark replaces the old mark at one to a trillion

Why print?

The government of Chancellor Cuno ordered the Ruhr to stop working for the French, and then paid the strikers. Which explanation best accounts for the decision to pay them with printed money?

• The Ruhr was the source of most of the industrial income the state relied on, so with its output stopped the government had no revenue to pay the strikers from and no lender willing to cover it, and printing was the only option left that did not mean surrender.
• The government wanted to destroy the savings of the middle class.
• The French ordered the printing as part of the occupation.
• The government hoped inflation would wipe out the reparations debt.

Who lost and who gained

Hyperinflation did not hit everyone alike, and the exam rewards students who can say precisely who suffered and who did not.

Question 1: inference from a source

Source A: the price of a loaf of bread in Berlin, in marks, as commonly reconstructed from the records of the time. A student infers that the collapse of the mark was concentrated in 1923 rather than spread across the whole post-war period. Tap the TWO entries that together support that inference best.

• December 1918: 0.63 marks
• January 1923: 250 marks
• July 1923: 3,465 marks
• September 1923: 1,500,000 marks
• November 1923: 200,000,000,000 marks

The occupation: which are true?

Select the THREE statements that are true of the occupation of the Ruhr.

• Some 60,000 French and Belgian troops went in on 11 January 1923 to seize coal, timber and goods in place of the missed deliveries.
• Around 130 Germans were killed in clashes with the occupiers and about 150,000 were expelled from the region.
• Passive resistance cut the coal the French could take, but it also cut the coal and steel the German economy ran on.
• Britain sent troops to join the occupation.
• The German army fought the French for control of the valley.
• The occupation ended when Stresemann called off passive resistance in September 1923.

The chain, and where the blame goes

Every question on 1923 is a question about a chain, and the marks are in the links: Versailles fixed a bill Germany said it could not pay. Germany fell behind on coal and timber. France went into the Ruhr on 11 January 1923 to take them. Berlin ordered passive resistance on 13 January. With the Ruhr idle the state lost its income and paid the strikers by printing. Prices ran away from the summer. On 13 August Stresemann took office, on 26 September he called off resistance, and on 15 November the Rentenmark stopped the printing. The Dawes Plan of 1924 then reset the payments and brought in American loans. The 3(d) question usually asks who was to blame. The strong answer sees that the chain has a French link and a German link: the occupation was a French choice, but resistance and printing were German ones, and hyperinflation followed from the second as surely as from the first. Blame only one side and you have half an argument.

Chancellor for a year

You hold the Chancellery in 1923. Four decisions, taken in the order the year set them. Choose as the real Chancellors chose, and notice the cost.

• January. French troops are in the Ruhr and the mines are in their hands. The army is 100,000 men and cannot fight. What do you order?
• April. Two million people in the Ruhr are being paid not to work, the state has no income from the region, and no bank will lend. Where does the money come from?
• September, and you are Stresemann. A loaf is over a million marks, there are risings on the left in Saxony and on the right in Bavaria, and the resistance has won nothing. What do you do?
• November. The printing has stopped but nobody trusts the old mark and there is no gold to back a new one. What replaces it?

From cause to consequence

Because reparations were fixed in _____ marks, inflation could not reduce them, so France lost nothing by waiting and Germany gained nothing by printing. Because the Ruhr produced most of the coal and steel, _____ resistance starved the German economy as much as the French. Because the state paid the strikers with printed money, the dollar that cost about 18,000 marks in January cost 4.2 _____ in November. Because the middle class lost its _____ and blamed the republic, the crisis fed the extremists, and the Munich Putsch came that same _____.

Price a loaf in 1923

In January 1923 a loaf of bread in Berlin cost about 250 marks. By September 1923 it cost about 1,500,000 marks. How many times more expensive had it become?

Question 3(a): how useful?

Source B, written for this module in the form of a letter: a retired Berlin schoolteacher writes to her son in October 1923 that her pension arrives on the first of the month and buys a week of food by the third, that she has sold the piano, and that the young people in her building laugh at the old for having saved. The enquiry is the effects of hyperinflation on the German people. Which paragraph uses the source best?

• The letter is useful for the effects on people on fixed incomes: the pension that lasts three days and the piano sold are exactly the experience of savers and pensioners that my own knowledge of the losers of 1923 confirms. Its provenance adds to that: a private letter to a son had no reason to exaggerate, and it was written in October, at the height of the crisis. It is limited to one household and one class; it cannot show the debtors and farmers who gained, so it needs another source for the whole picture.
• The letter is very useful because it was written at the time by someone who was there, so it must be accurate.
• The letter is not useful because it is only one opinion and the writer was upset.
• The letter says the pension buys a week of food by the third and that she sold the piano and that young people laugh at the old.

A 12-mark paragraph, marked

Question 2: Explain why Germany suffered hyperinflation in 1923. One reason for the hyperinflation was the policy of passive resistance. When French and Belgian troops entered the Ruhr on 11 January 1923 the government of Chancellor Cuno ordered the workers of the region not to work for them, and promised to pay their wages. The Ruhr produced about four fifths of the coal and steel of Germany, so the strike stopped the income the state depended on at the same moment as it created a new bill for two million wages. This meant that the government had no revenue to meet its promise and no lender to turn to, and it met the bill by printing marks, at a rate that reached 300 paper mills and 2,000 presses by the autumn. Each new note was worth less than the last, so that a dollar that bought about 18,000 marks in January bought 4.2 trillion by November. Passive resistance did not begin the fall of the mark, but it turned inflation into hyperinflation. What earned the marks: a cause named in the first sentence; specific support (the date, the Chancellor, the four fifths, the mills and presses, the exchange rates); the link phrase this meant that; and a closing sentence that returns to the question and weighs the cause. Two more paragraphs, on reparations and on the weakness of the mark before 1923, and the answer reaches the top level.

Write the 12-mark answer

Explain why there was an economic crisis in Germany in 1923. You may use the following in your answer: reparations; the occupation of the Ruhr. You must also use information of your own.

• Support that counts: a date, a figure, a name or a place
• Causes of your own: passive resistance, the printing of money, or the weakness of the mark since the war

Question 3(d): who was to blame?

An interpretation says the crisis of 1923 was made in Paris: without the occupation there would have been no hyperinflation. How far do you agree? Which point is the strongest AGAINST that interpretation?

• Resistance and printing were German decisions: the occupation took the coal, but it was the order of 13 January and the choice to pay two million wages with new notes that turned a fall in the mark into its destruction, and Stresemann proved it by ending both and stopping the collapse within weeks.
• The real cause was the Treaty of Versailles, so the Allies as a whole were to blame.
• Britain refused to join the occupation.
• Germany had been stabbed in the back in 1918.