A series of financial events unfolded in the years 1921 through 1923 that would propel the Nazis to new heights of daring and would even prompt Hitler into attempting to take over Germany.
In April of 1921, the victorious European Allies of World War I, notably France and Britain, presented a bill to Germany demanding payment for damages caused in the war which Germany had started. This bill (33 billion dollars) for war reparations had the immediate effect of causing ruinous inflation in Germany.
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The German currency, the mark, slipped drastically in value. It had been four marks to the U.S. dollar until the war reparations were announced. Then it became 75 to the dollar and in 1922 sank to 400 to the dollar. The German government asked for a postponement of payments. The French refused. The Germans defied them by defaulting on their payments. In response to this, in January 1923, the French Army occupied the industrial part of Germany known as the Ruhr.
The German mark fell to 18,000 to the dollar. By July 1923, it sank to 160,000. By August, 1,000,000. And by November 1923, it took 4,000,000,000 marks to obtain a dollar.
Germans lost their life savings. Salaries were paid in worthless money. Groceries cost billions. Hunger riots broke out.
For the moment, the people stood by their government, admiring its defiance of the French. But in September of 1923, the German government made the fateful decision to resume making payments. Bitter resentment and unrest swelled among the people, inciting extremist political groups to action and quickly bringing Germany to the brink of chaos.
