The Hyperinflation of 1923 & the “Golden Era” of the Weimar Republic

In 1922 because of the poor German economy the German government could not afford to pay the bill of ₤6.6 billion appointed to them by the Allied Reparations Commission, as a Result the French government sent French and Belgian troops to occupy the Ruhr. they intended to seize the coal and use the goods produced by the factory's to pay off the money owed. the German government called a paid workers strike. to do this they printed more money this caused the value of the mark to fall, as well as this the loss of production in the Ruhr caused factories to close elsewhere in germany, unemployment rose to 23%, tax money collapsed and the government's solution was to print even more money. all this together caused a major Hyperinflation and by 1923 the value of the mark collapsed altogether by november 4 trillion marked equaled 1 dollar. In 1923 came the solution to this great depression of Germany. All financial support to the general strike in Ruhr was ceased, a new stable currency the Rentenmark was introduced it was equal to 1 trillion marks. This ended the hyperinflation. stable exchange rate was established with the dollar. In return for Chancellor Stresemann agreement to meet Germany's reparations obligations the Allies agreed to set up a committee under the American banker Charles Dawes. his Proposals set a Moderate scale of payments, rising from ₤50 million to ₤125 million after five years. The french ended the occupation of Ruhr and ₤800 million was loaned from America. for the next five years because of American loans the German economy was booming and the Weimar Germany prospered. This time was known as the “Golden Era”.