Economic Issues

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Post War Legacy and the State of the Economy in 1919

The German economy had been drained by the First World War and also the Treaty of Versailles.

Demobilising the economy

Adjusting from a wartime to a peacetime economy took time. Some companies (e.g. Krupp) had moved over to arms and munitions supply.
Economic capacity had been worn down by the war effort and investment was needed to rebuild it.

Impact of shortages

The winter of 1918-1919 was harsh and the British blockade of German ports continued into 1919.
Food shortages led to price rises.
Rising prices led to an increase in poverty.
Anger at profiteering grew.
The influenza epidemic caused greater casualties than the war and was worsened by malnourishment and low standards of living.
There were food shortages again in 1923 because of the Ruhr crisis.

The loss of territories

The loss of territories, such as the Saarland, under the Treaty of Versailles had led to a reduction in raw materials and markets for German goods.

The Effect of Reparations on Germany's Economy

Reparations seriously damaged Germany's economy. It became quickly apparent that Germany would not be able to pay them in full.

The sum of reparations

The sum was fixed in 1921 at £6.6 billion. Payments were to be made in gold or in kind (goods, raw materials).

Government expenditure

Expenditure was rising because the Weimar Republic brought in welfare benefits and had to pay widows’ and veterans’ pensions and compensate war victims.
It also paid compensation to people who lost land under Versailles and gave cheap loans and subsidies to help industry.

Government debt

The German government was already in debt because of war expenditure. It soon exhausted its already low gold reserves.
The government had to buy goods and raw materials to meet reparations payments. The government printed money to meet its expenditures.

Inflation

Printing more money without economic growth leads to inflation. The currency loses value, so more money is demanded for goods by suppliers and shops.
Marks were soon losing value quickly. In January 1918, there were 8.9 marks to $1. In January 1920, there were 14; in January 1921, there were 64.9.
The fall in the value of marks accelerated in 1922. In January 1922, there were 191.8 marks to $1. In January 1923, there were 17, 792 marks to $1.
The German government fell behind with reparation payments.

Historical and economic assessment

Economists debate whether the terms of the Treaty of Versailles actually had a negative impact on the German economy.
Whilst 2.5% of GDP was spent on reparations between 1925 and 1930 those in the Cobdenite camp would argue that the limited military spending imposed by Versailles was fiscally beneficial for Germany. Cobden argues that spending lots of money on the military slows economic growth and means there is less spending elsewhere in the economy.

1The Weimar Republic 1918-1933

1.1Establishment Of The Weimar Republic 1918-1924

1.1.1Post WW1

1.1.2Weimar Constitution

1.1.3Peace Settlement

1.1.4End of Topic Test - Germany Post WW1

1.1.5Economic Issues

1.1.6Economic Issues 2

1.1.7Social Issues

1.1.8End of Topic Test - Economic & Social Issues

1.1.9Extremist Threats

1.1.10Extremist Threats 2

1.1.11End of Topic Test - Extremist Threats

1.1.12Political Instability & The Invasion of the Ruhr

1.1.13Weimar Government by 1924

1.1.14End of Topic Test - Weimar Government by 1924

1.1.15A-A* (AO3/4) - Germany Post WW1

1.2The 'Golden Age' Of The Weimar Republic 1924-1928

1.2.1Economic Developments

1.2.2Industry & Agriculture

1.2.3End of Topic Test - Economic Developments

1.2.4Social Developments

1.2.5Social Developments 2

1.2.6End of Topic Test - Social Developments

1.2.7Political Parties

1.2.8Political Stability

1.2.9End of Topic Test - Weimar Politics

1.2.10Germany's International Position

1.2.11Germany's International Position 2

1.2.12End of Topic Test - International Position

1.2.13A-A* (AO3/4) - The Weimar 'Golden Age'

1.3The Collapse of Democracy 1928-1933

1.3.1The Impact Of The Depression

1.3.2Politics After The Depression

1.3.3The Appeal Of Extremism

1.3.4End of Topic Test - The Depression & Politics

1.3.5'Backstairs Intrigue'

1.3.6'Backstairs Intrigue' 2

1.3.7End of Topic Test - Backstairs Intrigue

1.3.8Political Developments

1.3.9The State by March 1933

1.3.10End of Topic Test - Political Developments

1.3.11A-A* (AO3/4) - The Collapse of Democracy

2Nazi Germany 1933-1945

2.1The Nazi Dictatorship 1933-1939

2.1.1Hitler's Consolidation Of Power

2.1.2The Terror State

2.1.3End of Topic Test - Consolidation of Power

2.1.4Opposition

2.1.5Propaganda

2.1.6A-A* (AO3/4) - Terror State & Propaganda

2.1.7End of Topic Test - Propaganda

2.1.8Economic Policies

2.1.9Economic Policies 2

2.1.10Impact Of Economic Policies

2.1.11Impact Of Economic Policies 2

2.1.12End of Topic Test - Economic Policies

2.1.13Social Policies

2.1.14Social Policies 2

2.1.15Volksgemeinschaft

2.1.16End of Topic Test - Social Policies

2.1.17A-A* (AO3/4) - Economic & Social Policies

2.2The Racial State 1933-1941

2.2.1The Radicalisation Of The State

2.2.2Anti-Semitism

2.2.3Development Of Anti-Semitic Policies

2.2.4Development Of Anti-Semitic Policies 2

2.2.5End of Topic Test - Anti-Semitism

2.2.6Treatment of the Jews in the Early Years of War

2.2.7Deportation & Anti-Semitism Evaluation

2.2.8End of Topic Test - Early Treatment of the Jews

2.2.9A-A* (AO3/4) - The Racial State

2.3The Impact Of War 1939-1945

2.3.1Home Front

2.3.2Impact On Society

2.3.3Impact On Society 2

2.3.4End of Topic Test - Impact of the War

2.3.5War Economy

2.3.6War Economy 2

2.3.7Policies Towards The Jews & Untermenschen

2.3.8A-A* (AO3/4) - Impact of the War

2.3.9End of Topic Test - War Economy

2.3.10Opposition

2.3.11Opposition 2

2.3.12Nazi State by 1945

2.3.13End of Topic Test - Opposition

2.3.14A-A* (AO3/4) - Opposition & The State in 1945

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