Germany, at this time, was in the same economic boat as the rest of Europe. The ratio of the German mark to the U.S. dollar was 4:1. The weekly cost of living on the bare necessities, food, shelter, and clothing, was roughly 21.50 marks for a low-income family of four. Families were able to spend their money on these necessities, which included a large portion on heat, and still have the flexibility to spend the remaining thirty percent or so of their income on other "luxury" items (which would include the majority of clothing). These stable times quickly passed as the war went on however. The war ended in 1918 and the Germans found themselves at the beginning of a downward trend that would continue for decades to come. As a result of losing the war the Germans were forced to pay reparations to the English, the French, and the Americans and fell into a state of enormous debt. The Grand Alliance also took it upon themselves to institute a new democratic government, called the Weimar Republic, in Germany. This government was set up rather hastily and without much planning, and thus, proved to be very ineffective. When the war ended, the mark to dollar rate had dropped to 5:1. Within one year that rate was 8:1. In 1921, the mark to dollar ratio was 62:1. This trend unfortunately continued throughout the next few years. In December of 1923, the rate of the German mark to the U.S. dollar was 4 trillion to one. This incredible drop in the value of the mark was a result primarily of the actions of the Weimar Republic. In an attempt to pay off their enormous debts, the government came up with a juvenile plan to simply print more money. Obviously this extreme drop in the value of the mark was not anticipated, but a remarkable fact is that the Germans continued this policy of printing more money day and night for roughly six years. All the while, they sat and watched as the value of money plummeted and the central bank was forced to print larger denominations of bills on a monthly basis.
