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The Year of Crisis: 1923

The Year of Crisis: 1923. Why was 1923 a year of crisis?. Important Events. 1921 Reparations fixed at 132 billion gold marks 1923 January – Occupation of the Ruhr January-February – Hyperinflation. Economic Background. By 1914 – most powerful economy Competitor with Britain

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The Year of Crisis: 1923

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  1. The Year of Crisis: 1923 Why was 1923 a year of crisis?

  2. Important Events • 1921 • Reparations fixed at 132 billion gold marks • 1923 • January – Occupation of the Ruhr • January-February – Hyperinflation

  3. Economic Background • By 1914 – most powerful economy • Competitor with Britain • Extensive natural resources • Advanced, well-developed industrial base • Well-educated population • Advanced banking system • But then...

  4. TOTAL WAR

  5. Fundamental Problems • Loss of resources from territories • Cost of reparations repayment • Growing increase in prices • Increase in national debt National Debt 1914 – 5000 million marks 1918 – 144,000 million marks (1914) 1 US Dollar = 4.2 marks (1918) 1 US Dollar = 8.9 marks Saar, Alsace-Lorraine, Silesia Coal Production 16% Arable Land 13% Iron Ore 48% £6600 million Prices X4

  6. Causes of Inflation • Long Term • Military demands of First World War • Medium Term • Cost of social reforms, welfare, and reparations • Short Term • French occupation of the Ruhr in 1923 and passive resistance

  7. TASK • Read and research the causes of the Great Inflation • Be prepared to PRESENT your findings. • Complete the table to show all causes of the hyperinflation

  8. Long-term causes Medium-term causes Short-term causes

  9. Consequences

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