Invasion of the Ruhr

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Germany can't pay

With all the economic and social problems Germany faced, it soon became impossible for her to keep paying reparations to the Allies. These payments had been set at an extremely high level, more than Germany, crippled by war, could afford.

In January 1923 France and Belgium invaded the Ruhr, an industrial area of German bordering their own countries. This region, full of factories and coalmines, contained resources the French and Belgians intended to use to make up for the unpaid reparations.

German workers refused to co-operate with the French and Belgian armies, and went on strike. The German government supported them. The French sent in their own workers, and arrested the leaders of the German strikers and the German police. This led to violence on both sides.

 

Hyper-inflation

With the economy in ruins, and the Allies claiming reparations and taking control of industry, goods became difficult to obtain and therefore very expensive. To help with this problem and to pay the striking Ruhr workers, the government decided to print more money. Money became very easy to get hold of, but things to buy were just as scarce as ever. This meant that prices kept going up. Inflation became so bad that the price of an item could double in a matter of hours.

By the autumn of 1923 a loaf of bread cost 200,000,000,000 marks. Workers paid by the hour found their wages were worthless, because prices had risen since they began their shifts. People who had saved money for years saw the value of those savings wiped out.