What was hyperinflation and why is it important to understand when learning about the Weimar Republic crisis of 1923?

When did it happen?

- Hyperinflation occurred in Germany in 1923 when the Weimar Republic was in power.

What is hyperinflation? Why did it happen?

- Hyperinflation is when paper money loses its value and you suddenly need a great deal of it just to be able to afford everyday things. In Germany the government started printing money it simply did not have. By this I mean that more paper money was produced and circulated into the country but their gold reserves stayed the same - therefore each piece of paper money was worth less and less. This can be a difficult concept to understand at GCSE... you just need to know that in this case the government printed much more paper money when really it was not in a position to do so! On top of this there was a general strike meaning no goods were being made. The lack of things being made combined with more money printed meant paper money lost its value.

- After WW1 and the Treaty of Versailles, the Weimar government came into power. Germany was made to make reparation payments to other countries for the damage caused by the war. However, Germany simply could not afford to make these payments and in 1923 they missed a payment. Germany simply did not enough money in 1923.

- These 3 factors lead to hyperinflation: (1) Germany defaulting on the reparation payment, (2) the general strike, (3) printing more paper money.

What did it mean for Germany?

- Prices ran out of control and Germany currency became worthless. There was a economic crisis.

- This crisis meant people were desperate and unhappy with the government. Therefore hyperinflation caused rebellions and uprisings.

An example of what hyperinflation did:

- A loaf of bread cost 250 marks in Germany in January 1923. But by November of the same year this price had risen to 200,000 million marks!