Weimar hyperinflation refers to periods of hyperinflation which occurred during the era of the Weimar Republic that existed in Germany between 1918 and 1933. There were two major periods of economic crisis in Weimar Germany. The first occurred between 1921 and 1923 and was caused by ongoing instability within Germany after the country’s defeat in the First World War, as well as the burden of its enormous war reparations payments. This was the period of most pronounced hyperinflation in Germany. The second occurred in the early 1930s and came about as the economic crisis of the Great Depression struck Germany violently. In the first instance the value of the papiermark plummeted as inflation spiraled to several million percent in the republic, leading to the introduction of the Reichsmark. Both periods also caused immense political problems, in the case of the hyperinflation of the early 1930s facilitating the rise to power of the Nazis. Despite the economic problems created by hyperinflation, Weimar Germany remained an attractive destination for migrants fleeing greater political problems in other parts of Europe such as the former lands of the Russian Empire as the Soviet Union came into being.[1]
Weimar hyperinflation chronology of eventsWeimar hyperinflation chronology of events
The Weimar Republic came into being in November 1918 as the First World War came to an end and the German Empire collapsed. The new democratic country acquired its name from the fact that its first meetings were in the town of Weimar in central Germany. One of the first things this new republican government had to do was negotiate peace terms with the leading Entente powers that had defeated Germany in the war, Britain, France and the United States. Despite the efforts of US President Woodrow Wilson to temper their worst impulses, the British and French were not feeling merciful. They imposed harsh terms on Germany through the Treaty of Versailles, including a requirement to pay 132 billion gold marks in war reparations payments, a sum equivalent to upwards of two-thirds of a trillion dollars as of 2024. These war reparations, in conjunction with an enormous amount of money that Germany had spent during the war, created the conditions for the hyperinflation of the Weimar era.[2]
The major period of hyperinflation came between 1921 and 1923. In Germany, as in so many other countries across Europe, the end of the First World War did not bring peace. Instead civil wars and revolutions followed for another half a decade. In Germany socialist and radical nationalist groups literally waged war on each other in cities like Berlin and Munich in 1919 and 1920 and there continued to be much unrest for years to come. This compounded the issue of trying to figure out how to pay the war reparations and led to an economic crisis by 1921. The result was a collapse in confidence in the German papiermark, the currency brought in back in 1914, and spiraling hyperinflation in 1921 and 1922. It peaked in late 1923, by which time one US dollar was trading for over four trillion papiermarks.[3]
By then the French and Belgians had occupied the Ruhr region of western Germany and were requisitioning coal and other industrial outputs in order to ensure they were paid their reparations in kind if not in cash. This first bout of Weimar hyperinflation was only brought to an end in 1924 through the introduction of two new currencies in quick succession, the rentenmark and reichsmark, along with a US-mediated renegotiation of the reparations payments schedule through the Dawes Plan of 1924.[4]
The second period of economic crisis in Weimar Germany is more well-known in some ways, though at the same time it was arguably not as severe as the hyperinflation of the early 1920s. This came about owing to the impact of the Great Depression on the European banking system and the fresh crisis of confidence this created in the German economy. Inflation played a part, though the more troubling economic issue was a banking crisis in 1931, debt repayment issues as the US government called in its loans to Germany and spiraling unemployment that left six million people out of work. While nowhere near as bad as the hyperinflation of the early 1920s, the German economic crisis of the early 1930s was a by-product in some respects of the events a decade earlier and continuing problems with the reichsmark that had been brought into use in 1924. In the long run both periods led to the rise of the Nazis in Germany. As a party and movement they largely emerged during the chaos of the hyperinflation of the early 1920s and then managed to grow massively in electoral support and seize power as a result of the economic crisis of the early 1930s.[5]
Extent of migration associated with Weimar hyperinflationExtent of migration associated with Weimar hyperinflation
Curiously, Germany did not experience a large amount of outward migration owing to the hyperinflation. This contrasts with what usually happens when hyperinflation occurs. For instance, the most recent alarming example of hyperinflation in the early twenty-first century, the Venezuelan hyperinflation of the period from 2016 to 2022, led to a refugee crisis involving upwards of 7.7 million people by some estimates. This did not happen in Weimar Germany. Instead there was actually some considerable migration to Germany in the early 1920s, despite the economic chaos there. The political situation in other parts of Europe needs to be borne in mind when assessing this. For instance, the lands of the former Russian Empire in Russia, Ukraine, Belarus, Poland and other regions were mired in the Russian Civil War and a famine struck Russia in 1921 and 1922, one which killed five million people. Germany was not ideal by any standard, but it was still better than many other parts of Europe in the years following the First World War.[6]
A notable episode of migration concerned the Jewish community of Germany in the 1930s. When the Nazis claimed power early in 1933 there were some 523,000 Jewish people living in the country. While few could have predicted the horrors the Nazis would unleash on the Jewish people in the 1940s, most were familiar enough with their anti-Semitic rhetoric in 1933 to be worried and an initial wave of about 38,000 German Jews left the country after the Nazis came to power. This exodus remained gradual throughout the years that followed and then increased substantially in 1939 after the Kristallnacht pogroms of November 1938. Roughly 77,000 German and Austrian Jews left the burgeoning Third Reich for places like France, Britain and the United States in 1939. This flight of Jewish people from Germany and Central Europe could be viewed as an indirect result of the Weimar hyperinflation and the rise to power of the Nazis which it facilitated.[7]
Demographic impact of Weimar hyperinflationDemographic impact of Weimar hyperinflation
In the short term the largest demographic impact of Weimar hyperinflation was in the exodus of Germany’s half a million Jewish people from the country in the 1930s after the Nazis came to power. In the longer term it really is difficult to assess what the overall impact of the inflation was. For instance, a counterfactual could be applied that if the hyperinflation of the 1920s and 1930s had never occurred, the Nazis might never have come to power in Germany and the Second World War would not have ensued, with all its demographic destruction. Of course, this is highly speculative and it could just as easily be argued that the Second World War came about owing to a range of structural problems in the post-First World War settlement of Europe that made a second conflict inevitable, regardless of economic and political events in Germany.[8]
See alsoSee also
Explore more about Weimar GermanyExplore more about Weimar Germany
- Germany Newspapers from OldNews.com records collection on MyHeritage
- Germany, Marriages, 1558-1929 records collection on MyHeritage
- Germany, North Rhine-Westphalia, Deaths 1874-1938 records collection on MyHeritage
- Germany, Deaths and Burials, 1582-1958 records collection on MyHeritage
- Germany, Jewish Victims of Nazi Persecution, 1933-1945 records collection on MyHeritage
References
- ↑ https://www.dw.com/en/1923-how-weimar-combatted-hyperinflation/a-64184767
- ↑ https://www.history.com/news/germany-world-war-i-debt-treaty-versailles
- ↑ https://www.smithsonianmag.com/history/how-hyperinflation-heralded-the-fall-of-german-democracy-180982204/
- ↑ https://www.theholocaustexplained.org/the-nazi-rise-to-power/the-weimar-republic/invasion-of-the-ruhr/
- ↑ https://cepr.org/voxeu/columns/how-failing-banks-paved-hitlers-path-power-financial-crisis-and-right-wing-extremism
- ↑ Joachen Oltmer, ‘Protecting Refugees in the Weimar Republic’, in Journal of Refugee Studies, Vol. 30, No. 2 (June, 2017), pp. 318–336.
- ↑ https://encyclopedia.ushmm.org/content/en/article/german-jewish-refugees-1933-1939
- ↑ https://www.investopedia.com/articles/markets/022516/economic-conditions-helped-cause-world-war-ii.asp