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The Hyperinflation Crisis in Germany

Introduction

I suspect that this topic is one that most of us have struggled with at one time or another. We understand the principle of hyperinflation. Age may help us get some sense of its emotional impact on ordinary German citizens. But what about our students? They need to get some sense of the mathematical aspect of hyperinflation and of how it affected people mentally and hence its impact on politics. Here Dan Moorhouse, who teaches in Yorkshire, offers an activity which may help bridge this comprehension gap.

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Support

A formatted version of this activity should print from your browser (omitting this support section).

Or, a WORD version of this activity can be downloaded, click here.

This activity is based on the ’Simulation’ style of model; for more examples of this model, click here.

Objectives

How do you make the figures relating to hyperinflation real? How can you get students to comprehend the worthlessness of money illustrated in photographs and charts? This exercise is a short and simple attempt to make the impact of the hyperinflation crisis real to pupils. It makes use of data to establish a set of parameters for a short simulation exercise that is intended to bring home the pace at which money lost its value, and the ways in which this would impact on ordinary Germans at the time.

Setting Up

Put students into groups of 3 or 4.

Each group will need:

  • A copy of the chart below
  • A calculator

Find a number of willing volunteers among teaching staff and support staff around school to help later in the activity. Ideally this would be one volunteer per group, but it can be managed in other ways.

Provide each of these volunteers with:

The Activity

This chart shows the Wholesale price index for Germany in the early 1920’s. The starting point for the index is the outbreak of the First World War, with an index score of 1 assigned to that date. Luckily, the index hits 100 in mid 1922, allowing for some simple maths to be done in class.

July 1922

100.6

Jan 1923

2,785.0

July 1923

194,000.0

Nov 1923

726,000,000,000.0

 

Ask each group to discuss what do the numbers actually mean. How would these figures affect ordinary people in their everyday lives?

Take ideas from each group. Now move on to illustrating how the figures might have impacted on daily life.

Ask each group to look at the figures that they’ve been provided with. The chart covers a 15 month period. Begin by asking them to work out, on average, how quickly the German mark was losing its value at this time.

How do they do this?

In theory, something that cost 100 marks in July 1922 would, at the height of the hyperinflation crisis in 1923, cost 726000000000.

Divide 726000000000 by 100 to make the sums easier.

Now divide that number by 15. This provides you with an average loss of value, or increase in wholesale price, in each month covered by the chart. Discuss what this figure means with the class – can they comprehend what it actually means? (Probably not!)

Now move on to ask each group to think about how these figures would change on a daily basis, which should make the a little easier to understand. Again some simple maths can offer an indication of what’s going on.

Take your figure for an average month – which should be 484000000. What’s that each day? Divide by 30 to get an average.

Again, discuss what this figure means with the class - 16133333.33 per day.

Ask what this means to ordinary Germans, banks or businesses?

Ask each group to now consider how these figures would affect ordinary people in ‘real’ terms and in ‘real’ time. Ask each group to calculate the hourly rate of devaluation? (Divide by 24).

Ask students to consider what the answer means to them. How would the figure, 672222.2 marks an hour, impact on the daily lives of ordinary Germans? Discuss this with the class, asking what problems it may pose for ordinary families.

Tell the class that you are now going to demonstrate to them how these figures might have affected ordinary Germans. In each minute, the currency devalues, on average, at 11203.7 marks per minute. You are now going to show them what this meant in terms of simple family economics.

Tell the class that at the start of the lesson, a box of chocolates cost 10 German marks, and a much needed board marker cost 2 German marks.

The task of one individual in each group, or of a small group working together if there is only one ‘shop’ available for the students, is to purchase you a board marker. Give each group a Two million mark note and the location of somewhere in school where the items can be purchased. If they have enough change, they can buy a box of chocolates as well.

Send the chosen pupil(s) to make their purchases. Ask the students who have stayed in the room what they expect the shoppers to return with? Will they have enough money to make their purchases? What could they do if they don’t have enough money? What problems would there be for these shoppers if this situation was actually the family’s weekly food shop? How would they react and who might they blame?

Your volunteer shopkeepers (school office staff, reprographics staff etc) should be primed with some information. They need a copy of the minute by minute chart below, to help them work out how much the items cost. Ask them to barter with students if they don’t have enough money, and not to hand over the chocolates unless they are satisfied with the value of the goods offered by the students. For example, they want the chocolates; let’s have your pen, coat, bag, trainers etc…

Given the usual amount of time it takes for a class to arrive at your room, your introduction, the maths exercise and the time it takes the group to get to the location of the marker and chocolates, it’s more than probable that they’ll not have enough money to make the purchase.

When the group return, discuss the implications of the shopping trip they’ve just been on. They had 2 million marks to buy something that would have cost 12 marks only 20 or so minutes earlier. Ask them to explain what did they had to do to purchase everything they wanted.

Minute by Minute Price Guide

Minutes of lesson transpired

Cost of marker and chocolates

0

12

1

134,444.4

2

268,888.8

3

403,333.2

4

537,777.6

5

672,222.0

6

806,666.4

7

941,110.8

8

1,075,555.2

9

1,209,999.6

10

1,344,444.0

11

1,478,888.4

12

1,613,332.8

13

1,747,777.2

14

1,882,221.6

15

2,016,666.0

16

2,151,110.4

17

2,285,554.8

18

2,419,999.2

19

2,554,443.6

20

2,688,888.0

 

Debriefing

How would this affect Germans who were trying to buy food, pay rent or hire essential equipment?

How would it affect businesses wanting to order raw materials, workers collecting their wages or politicians trying to plan for future improvements?

What might be the political impact of hyperinflation? Who would people blame – their own government or would they connect hyperinflation with events abroad e.g. the Treaty of Versailles?

Reflections

  1. What difference has this activity made to students’ understanding compared to your normal methods of dealing with this topic?
  2. How might you improve the activity next year to bring out more effectively
  • how hyperinflation developed or
  • the impact of hyperinflation on the political situation?

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Feedback

Constructive feedback is always welcome, particularly anything that will help other teachers.

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This Page

Introduction

Support

Objectives

Setting Up

The Activity

Debriefing

Reflections

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