The period after WWI and directly leading into WWII was a pretty weird one for Germany in many respects — but particularly for its economy. In the years immediately following WWI in 1918, Germany experienced a steady recovery despite being forced to cough up reparations as part of Article 231 in the Versailles Treaty.
Unfortunately, the road to a healthy economy was a long one; during a three-year period between June 1921 and January 1924, the German mark suffered hyperinflation, which is characterised by price rises and a fall in the purchasing power of money, should you want to know. This caused a great deal of political instability in Germany, led to the occupation of the Ruhr by France and general misery for the citizens of Germany.
How did this all happen, you ask? In short, the Weimar Republic decided the best way to go about solving the shortage of money was to print more money. This allowed it to pay off its debts, including over £200 million worth of war debts, with worthless marks. The result? Germans increasingly found that their money, including their life savings, was worthless.
As you can imagine, this didn’t have a great effect on the economy. Soon enough, workers found themselves being paid hourly, and prices rose even faster. Before long, the poor couldn’t afford food and the middle classes saw their prosperity melt away. Hyperinflation meant that many Germans faced a total collapse in their standard of living and urgent action had to be taken to stabilise the economy.
In November 1923, hyperinflation reached its peak. Desperate times called for desperate measures, and then-Chancellor Gustav Stresemann resorted to destroying all the worthless marks and replacing them with a new currency, the Rentenmark.
Despite this, things remained pretty bleak in Germany until 1924, when the US took pity on the country and initiated the Dawes Plan in a desperate bid to save its economy. The Plan saw the US lend Germany money to stave off economic ruin – which was pretty nice of them when you think about it.
The country was next plunged into economic ruin when Wall Street crashed, as it was heavily dependent on the US. The Great Depression even hit the Germans who were lucky enough to still have a job; those who did have work found their income and hours reduced. By 1932, millions of Germans faced hunger and homelessness.
As you might imagine, these conditions helped Hitler gain followers and power; basically, Germans were desperate. Around this time, politics in Germany became more polarised between the extreme left and right wing. This saw the votes for both the Communists and the Nazis increase, only for Hitler to win out in the end.
After being voted in as Chancellor of Germany in 1933, Hitler did manage to improve the lives of Germans by saving them from political chaos and economic ruin, but as we all know this came at a high price; genocide.