Following World War I, Germany was forced to accept sole blame for the war and pay exorbitant reparations. Expert Answers davmor Certified Educator The terms of the Versailles peace treaty were thought by many—and not just in Germany—to be unduly harsh and punitive.
Stabilization[ edit ] The hyperinflation crisis led prominent economists and politicians to seek a means to stabilize German currency.
In Augustan economist, Karl Helfferichproposed a plan to issue a new currency, the "Roggenmark" "rye mark"to be backed by mortgage bonds indexed to the market price of rye grain.
The plan was rejected because of the greatly fluctuating price of rye in paper marks. Agriculture Minister Hans Luther proposed a plan that substituted gold for rye and led to the issuance of the Rentenmark "mortgage mark"backed by bonds indexed to the market price of gold.
Rentenmarks were not redeemable in gold but only indexed to the gold bonds. The plan was adopted in monetary reform decrees, on October 13—15, The Rentenbank refused credit to the government and to speculators who were not able to borrow Rentenmarks, because Rentenmarks were not legal tender.
Twelve zeros were cut from prices, and the prices quoted in the new currency remained stable. When the president of the Reichsbank, Rudolf Havensteindied on November 20,Schacht was appointed to replace him.
By November 30,there were , Rentenmarks in circulation, which increased to 1,, by January 1, and to 1,, Rentenmarks by July Meanwhile, the old paper Marks continued in circulation.
The total paper marks increased to 1. By one dollar was equivalent to 4. Revaluation[ edit ] Conversion Table Eventually, some debts were reinstated to compensate creditors partially for the catastrophic reduction in the value of debts that had been quoted in paper marks before the hyperinflation.
Similarly, some government bonds were reinstated at 2. The reinstatement of some debts and a resumption of effective taxation in a still-devastated economy triggered a wave of corporate bankruptcies. One of the important issues of the stabilization of a hyperinflation is the revaluation.
The term normally refers to the raising of the exchange rate of one national currency against other currencies. As well, it can mean revalorization, the restoration of the value of a currency depreciated by inflation.
The German government had the choice of a revaluation law to finish the hyperinflation quickly or of allowing sprawling and the political and violent disturbances on the streets.
The government argued in detail that the interests of creditors and debtors had to be fair and balanced.
Neither the living standard price index nor the share price index was judged as relevant.
The calculation of the conversion relation was considerably judged to the dollar index as well as to the wholesale price index. In principle, the German government followed the line of market-oriented reasoning that the dollar index and the wholesale price index would roughly indicate the true price level in general over the period of high inflation and hyperinflation.
In addition, the revaluation was bound on the exchange rate mark and United States dollar to obtain the value of the Goldmark. However, it has been the subject of the most scholarly economic analysis and debate.
The hyperinflation drew significant interest, as many of the dramatic and unusual economic behaviors now associated with hyperinflation were first documented systematically: German monetary economics was at that time heavily influenced by Chartalism and the German Historical Schoolwhich conditioned the way the hyperinflation was analyzed.
The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance.
The French declared that Germany should keep paying reparations, but Britain sought to grant a moratorium to allow financial reconstruction.
Other causes cited included bankers and speculators particularly foreign. Hyperinflation reached its peak by November  but ended when a new currency the Rentenmark was introduced.
To make way for the new currency, banks "turned the marks over to junk dealers by the ton "  to be recycled as paper. Aftermath[ edit ] Germany, The Los Angeles Times estimated in that more of the decommissioned notes were spread about the US than existed in Germany.
The Treaty of Versailles imposed a huge debt on Germany that could be paid only in gold or foreign currency.Feb 17, · Russia's exit. Russia's exit from World War One, in , must have made an eventual victory for Germany seem quite likely to German leaders, and vindicated their nurturing of .
To cite this website as a reference, use the following format: CLARE, JOHN D. (/), leslutinsduphoenix.com Unless specified on the page, to cite a specific. Germany - History: Germanic peoples occupied much of the present-day territory of Germany in ancient times.
The Germanic peoples are those who spoke one of the Germanic languages, and they thus originated as a group with the so-called first sound shift (Grimm’s law), which turned a Proto-Indo-European dialect into a new Proto-Germanic language within the Indo-European language family.
Germany - History: Germanic peoples occupied much of the present-day territory of Germany in ancient times. The Germanic peoples are those who spoke one of the Germanic languages, and they thus originated as a group with the so-called first sound shift (Grimm’s law), which turned a Proto-Indo-European dialect into a new Proto-Germanic language within the Indo-European language family.
After the introduction of the republic, the flag and coat of arms of Germany were officially altered to reflect the political changes. The Weimar Republic retained the Reichsadler, but without the symbols of the former Monarchy (Crown, Collar, Breast shield with the Prussian Arms).This left the black eagle with one head, facing to the right, with open wings but closed feathers, with a red beak.
The problems of the Weimar Republic (this site was uploaded to the internet by Redruth School, Cornwall, in ) German attitudes to defeat in and the treaty of Versailles.