The Stability of the Weimar Republic's Economy by 1924
In 1918 the German economy was on the verge of collapse. Germany had
committed so much money to its armed forces during the First World War
that it barely had enough to feed its people. This was without the
complications of the Treaty of Versailles in 1919 that crippled it
further.
The treaty of Versailles demanded ridiculous sums of money from
Germany in order to pay for damage done to Europe during the campaign.
They asked the Germans for £6600 million to cover this cost. This was
an enormous figure at the time and one that Germany would not have
been able to pay.
Due to the fact that the Germans had no goods or raw materials to
trade, because the treaty of Versailles also took away a large
proportion of their industry, the government thought that it would be
a good idea if they just printed more money. This way they thought
they could pay off their debts in worthless marks. This repayment also
included their war debts. The great industrialists would also be able
to pay off their debts overnight. This however started a chain
reaction with money printing spiralling out of control.
To compare prices: a loaf of bread in 1918 would cost you 0.63 Marks,
but by November 1923 it would set you back nearly 201,000,000,000
Marks. This is a price increase of roughly thirty-two thousand billion
percent (32,000,000,000,000 %). Also by 1923 people were bringing home
their wages, which were paid daily, in wheelbarrows and suitcases. It
was also common for people to light fires and cigarettes with
banknotes because it was cheaper than striking a match. (a match was
worth about 1,000,000 Marks by 1923! Price increase was also so great
that by the time that you got to the front of the queue for food the
price may have as much as doubled.
People were hit hard by hyperinflation. A well-off middle class family
would find that the savings that they had in the bank would have