Inflation and hyper inflation Stresemann and currency stabilisation

Inflation and hyper inflation Stresemann and currency stabilisation US investment and economic recovery and growth

Connector

Outcomes • All to understand the causes of hyperinflation/role of Stressman/ US investment and economic growth • Most to present information to rest of group • Some to do this with support

Input • Hyperinflation= A period of rapid inflation that leaves a country's currency virtually worthless • What would be the cause of hyperinflation

Task • Choose – Inflation and hyper inflation – Stresemann and currency stabilisation – US investment and economic recovery and growth – The different governments of the Weimar Republic

Task • Research today • Present to rest of group on Wednesday/Thursday • Email slides to Mr Bolt

Use the following • Class Textbooks • Internet • Library resources

Reparations • 1919 -21 - 23 conferences about paying reparations • 1921 the figure set at 226, 000 000 gold marks • Germans said this was excessive- French said NON! And instead invaded the parts of the Ruhr, • Reduced to 132 milliard in May 1921 (2000 million a year). If they did not pay French would occupy rest of Ruhr.

• The government resign and new government led by Wirth accept the terms and in order to pay the first instalment- GET A LOAN- the policy of FULFILMENT • In 1919 Germanys debt was 144 milliard marks, by 1922 it had risen to 469 milliard • There was no balancing budget and no currency reforms this led to hyperinflation • In 1922 they asked to suspend reparations but French said NON! And instead demanded “production guarantees” (goods) • Instead of this the German printed more money, which was the Allies saw Germany sabotaging payments • In 1922 government faced financial disaster as Germany had also failed to provide coal and timber.

• Ruhr Crisis- in 1923 Jan- 60 000 troops from France and occupied the Ruhr, German workers met them passive resistance, so the French replaced them with their own. • The Germans reduced the amount of coal they had to pay but, had to millions of marks in compensation to those that had lost business due to occupation, and they also lost TAX revenue • Therefore they PRINTED MORE MONEY- August 1923663 billion marks in circulation and the currency collapses as did the economy. • August- Gustav Stresemen became chancellor – September 1923 - reparations are resumed – Nov 1923 – RETENMARK- new currency, limited printing, secured against assets in industry and agriculture. 700 000 civil servants (cutting servant) – RETENBANK is opened and SCHACHT was appoited Currency Commissioner

Read red book and take notes • Take notes from pages 93 -102 using the subheadings