The time of The Great Depression was a worldwide disaster that impacted any major country. People lost their jobs and lives, businesses closed down, and debts skyrocketed. It destroyed economies and took down the reputation of political parties that were in charge. What I wanted to examine was the impact of this depression on the World War I loser, Germany. I got interested because of the economic damage that the war has brought upon has been amplified greatly by the depression and I wanted to know how they could have survived as a country.

Introduction to the Situation of Germany

      After World War I, Germany was forced to pay a lot in war reparations to the allied powers because they had lost the war. Having to pay approximately 33 million US Dollars in war reparations in a foreign currency, Germany payed slowly because there was simply not enough money in Germany.

 

The 1920’s

      Germany began printing large amounts of money to buy foreign currencies so they could pay off the reparations without actually industrial infrastructure to back it up. This caused the German Mark to fall from 4 Marks per 1 US Dollar to 48 Marks per US dollar. Soon, Germany could afford to pay like this anymore because the Mark was depreciating too quickly. They were ordered by the allies to pay in resources such as coal. The French occupied parts of the Ruhr Valley where Germany’s coal was to enforce this. German coal workers went on strike so Germany continued paying with money. In late 1923, 1 US dollar was worth 4,210,500,000,000 German marks. Bank notes were so useless that families used whole stacks of notes to stack castles out of. Some were being used wallpaper. A whole barrel full of notes was barely enough to buy a loaf of bread. As the roaring 20s arrived, Germany finally began to recover slightly after 1923. German bankers came up with a currency that was based on the price of rye and the German economy improved. Germany began to ask for loans from countries like the US for money. This resulted in the Germany economy being largely built upon foreign loans. Near the end though, the US started adding tariffs on imports to protect its companies. This shrank the production rate of Germany and factories shrunk which did not help its current state.

Children using money as toys

The Great Depression

      Right after the stock market crash in New York that started The Great Depression, people in America started to recall their loans from Germany to recover their money. This destroyed the German economy because it was largely built upon these loans. There were several runs on major banks in Germany many of which folded. The government decided not to follow normal protocol and increase government spending to stimulate the economy. They started to increase taxes and did wage cuts in an attempt to lower prices on goods. This caused lots of criticism towards the government which created instability with the populace. 6 million people were without work. There were goods to be bought but no one had the money to buy them. Distrust of the political party that was in charge led people to join other parties that had more radical ideas to solve the problem with the economy. One of these parties was the National Socialists Workers Party (NSDAP) more commonly known to the western world as the Nazi Party. Many believe the leader of this party Adolf Hitler only rose to power because of what The Great Depression did to Germany. The NSDAP later was elected as the party in charge when the previous government dissolved and held an election. All of this set the stage for World War II.

 

 

 

 

 

Bank notes as wall paper

Comic

Below is my pathetic attempt to make a comic that is meant to be funny.

Reflection

      I already knew some of the information about this topic from some fun research I did sometime ago. After properly researching the topic for an assignment, I found out so much more and finally understood some of the more complex ideas of hyperinflation. I know I jumped the gun on this assignment when we would learn about this later. I still find it amazing how Germany could have survived as a state after their bank notes were used as wall paper!