
During the crisis workers were often paid twice per day because prices rose so fast their wages were virtually worthless by lunchtime. By Autumn 1923 it cost more to print a note than the note itself was actually worth. At the height of the crisis the cost of a cup of coffee could double whilst somebody waited in the queue! Prices spiralled out of control, for example a loaf of bread, which cost 250 marks in January 1923, had risen to 200,000 million marks in November 1923. This led to people losing trust in the German paper currency the Deutsche mark, which meant its value decreased even more and prices for goods began to increase. Money was being printed without any matching productive economic activity. The government’s solution was to pay the workers by printing more paper currency. The government had promised to pay the striking workers, despite not having any money. This loss of productivity hurt the German economy hard as fewer goods were produced. Throughout the French and Belgian occupation production fell drastically as German workers were encouraged to passively resist (refuse to work) whilst the factories were under foreign occupation. The Ruhr Valley was Germany’s most productive industrial centre. The extremely high cost of food after the 1923 devaluation in Germany Germany was already suffering from high levels of hyperinflation due to the effects of the war and growing government debt. The German government ordered workers to follow a policy of ‘passive resistance’ – refusing to work or co-operate with the foreign troops and in return the government continued to pay their wages.
Their aim was to confiscate industrial goods as reparations payments. In response, France and Belgium sent troops into Germany’s main industrial area, the Ruhr Valley.The French believed Germany could make the repayment but were choosing not to, however the German government argued they could not afford to pay. The first reparations payment had taken all she could afford to pay.
In November 1922 Germany defaulted on its reparations payment as scheduled.Germany began to pay reparations in 1922, but after a payment was missed late in the year a chain of events was set off that led to French and Belgian occupation of the Ruhr Valley in Western Germany and hyperinflation. Excerpt from the Treaty of Versailles, 1919 French and Belgian occupation of the Ruhr