Newspaper Article: Hyperinflation Hits Germany
The Great War resulted in Germany being plunged into debt, owning a total of 144,000 million marks by 1919.
The Treaty of Versailles, also from 1919, did not help this, with Germany owing the Allies a total of 20,000 billion gold marks in reparations, the sum having been finally set in May 1921. In July 1922, the German government asked the Allies to suspend the reparation payments, but they were refused. By December 1922, the national debt had reached a huge total of 469,000 million marks.
In November 1922, a new centre-right government came to power, led by Wilhelm Cuno. This new government faced a major financial crisis.
Germany failed to pay reparations in 1922, and in response to this, the French invaded the Ruhr region, in the South of Germany. French engineers were sent to ensure the production of coal, supported by 60,000 French and Belgian soldiers.
Germany reacted to this with fury, with Cuno's government encouraging the workers and residents of the Ruhr to offer passive resistance. Also, Cuno ordered the immediate postponement of reparation payments. This in turn caused the French and Belgian authorities to overtake the mines and railways, as well as arresting mine owners. Passive resistance meant that the amount of coal sent to France and Belgium was significantly reduced. However, the cost to Germany itself was immense.
In Germany in 1923 there was such a high demand for paper money that there were 300 paper mills running 24hrs a day. The huge requirement for paper money was for civil servants, welfare payments, pensions, war-victims and widows, employment programmes and subsides, and industry and business inducements. As said before the Ruhr crisis was a huge cause of hyperinflation and came as the final blow to the faltering Mark,