Galerie

der Danziger Inflationsjahre 1923 

and cut across established lines of communications, such as railroads. Protectionism by the governments reduced trade, blocked efficiency and progress. See map of new boundaries.

The industrialized nations of the west had lost many of their traditional overseas markets for their manufactured goods, since their customers had learned to do without them during the war. Britain lost or sold a quarter of her overseas investments, France a half, Germany virtually all of them. Germany also lost a large part of her mineral resources, her fleet and most of her merchant marine, while the Allies’ shipbuilding soon led to a crisis of over-production. Massive panic migrations of people with few assets and little hope occurred, with a million Germans fleeing the lost eastern territories. In 1920, the U.S.A. reduced its immigration ( quotas, intensifying European pressures. Perhaps most significantly, the abandonment of the gold standard in the war had allowed different degrees of inflation to take place in different countries, and the resulting uncertainties reduced foreign trade and investment, created hyperinflation in some areas and paved the way for competitive exchange manipulation by others.

The post-war economic crisis was fueled by the reparations clause of the Treaty of Versailles. European diplomats still remembered the French milliards paid to Germany after the War of 1870 as an example of a payment which greatly benefited the victor. W.W.I, however, was typified by destruction of an unparalleled nature, and reparations calculations, propelled upward by public opinion, bore no relation to German capacity to pay. The final effects of these inflated demands soon proved to be counter-productive.

No agreement could be reached on the precise figure to be demanded, so Germany was asked to pay without a finite end in sight. A total of 132 milliard gold marks finally fixed in 1921 did not help because of its enormity and its developing resentment and hatred of the Versailles Treaty, eventually fueling Hitler’s rise to power. (See poster on next page.) The huge sum also placed unusual burdens on the German government and contribute to its loss of control in an inflation of astronomical proportions. By November 1923, the U.S. doUar exchange rate with the mark changed hourly and finally dropped to 4,200 billion for one U.S. dollar In Germany, a million million depreciated marks equalled one old one.

 

Danzig Report  Nr. 21 - November - December - 1978, Page 2.