Can anyone help me explain why the German economy faced problems in 1919-1923?
This was mainly due to the Treaty of Versailles and the economic sanctions placed on Germany such as having to pay the victors £6,600 million which they were never going to be able to pay.Also they lost industrial territory which would have helped them rebuild their economy after the war. They lost coal from the Saar and Upper Silesia which cost them a lot.Add to this the fact they were not allowed to unite with Austria to create a superstate which was trying to keep Germany's economic potential to a minimum.
In addition to the Treaty of Versailles, because Germany owed so much money, they started to print more Marks (paper money), which eventually lead to hyperinflation to such a high degree that their money eventually lost almost all of its value (imagine an economy where money was virtually worthless).Further, as Germany was having difficulty making the payments, France actually started occupying the industrial region of the Ruhr, so that it could make the money owed by using German resources. This began in 1923, and by the end of the year, the German economy was a disaster (By November 1923, the American dollar was worth 4,210,500,000,000 German marks).
The Weimar Republic was created at a time of confusion and chaos after Germany had lost the First World War. Many people felt that Germany had received a very harsh deal in the Treaty of Versailles and they resented the government for signing it and agreeing to its conditions.The Weimar Republic faced violent uprisings from various groups, not to mention devastating economic problems.Germany between 1918 and 1919 was in chaos. People were starving, the Kaiser had fled and people hated the government for signing the armistice in November 1918 - they called them the November criminals. Bands of soldiers called Freikorps refused to disband and formed private armies. It was not a good start for the Republic.There was continuous violence and unrest:In March 1920, there was a rebellion - the Kapp Putsch - that aimed to set up a new government as the rebels were angry at them for signing the Treaty of Versailles.Nationalist terror groups assassinated 356 government politicians.Many of the people in Germany were communists, who wanted to bring in a Russian-style communist government. There were a number of communist uprisings. For instance, in 1919 the Spartacists rebelled in Berlin.The Weimar government's main crisis occurred in 1923, when the Germans failed to make a reparations payment on time, which set off a train of events that included:a French invasion of the Ruhra general strikerunaway inflation - hyperinflationa number of communist rebellionsan attempted Nazi putsch in MunichIn Jan 1919, 50,000 Spartacists rebelled in Berlin, led by the Communists Rosa Luxemburg and Karl Leibknecht.In 1919, communist workers' councils seized power all over Germany, and a Communist People's Government took power in Bavaria.March 1920, the right-wing nationalist Dr Wolfgang Kapp took over Berlin. The army refused to attack him; he was only defeated when the workers of Berlin went on strike.In 1920, after the failure of the Kapp Putsch, a Communist paramilitary group called the Red Army rebelled in the Ruhr.Nationalist terrorists assassinated 356 government politicians, including Walter Rathenau, the foreign minister, and Matthias Erzberger who had been finance minister. The judges, many of whom preferred the Kaiser's government, consistently gave these terrorists light sentences, or let them go free.