Karl Joseph WirthSeptember 1921
An economic crisis grips Germany which causes runaway inflation and ends additional reparations installments
Germany · Government / Weimar Republic. Chronological records rendered directly from the World History Database.
An economic crisis grips Germany which causes runaway inflation and ends additional reparations installments
German currency begins to collapse
At the end of the reparations moratorium, Germany cannot resume payments and defaults, France, accompanied by a token Belgian force, marches into the Ruhr Valley and sets up a military occupation
Stresemann issues the Rentenmark, to halt the extreme hyperinflation crippling German society and the economy. It was successful because Stresemann refused to issue more currency, the cause of the inflationary spiral. Six days after the Munich putch a reform of the German currency takes place and the Rentenmark is introduced, this effectively ends inflation
To further stabilise the economy Stressman reduces spending and bureaucracy while increasing taxes
War bonds (which are rated by Reichsmark, not Goldmark like the reparations) can be paid back without problems, savings on banks (or in war bonds) are lost, leading to widespread poverty. Inflation reaches an all time high, 1 US-Dollar costs 40 Billion Marks
A new currency, the Rentenmark, is introduced at the rate of 1 trillion (1,000,000,000,000) Papiermark for 1 Rentenmark. At that time, 1 U.S. dollar was equal to 4.2 Rentenmark
The Republic claimed it could no longer afford the reparations payments required by the Versailles Treaty, and the Government defaulted on some payments, in response, French and Belgian troops occupied the Ruhr. Occupation of the Ruhr leads to hyper-inflation
At the end of the reparations moratorium, Germany cannot resume payments and defaults, France, accompanied by a token Belgian force, marches into the Ruhr Valley and sets up a military occupation. The Republic claimed it could no longer afford the reparations payments required by the Versailles Treaty, and the Government defaulted on some payments, in response, French and Belgian troops occupied the Ruhr
The Dawes Plan is put forward to stabilize the economic situation in Europe, to enable the Germans to pay their reparations and the Allies to pay their debts to the US
Germany's economy collapses
Invokes article 48 to impose deflationary policies
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