The Treaty of Versailles _ The German Economic Collapse

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					The Causes of WWII Part 1:
 By the summer of 1918, it was clear Germany had lost
  the war
 The Germans tried negotiate terms to end the war
  while maintaining their honor
 The US President, Woodrow Wilson, proposed 14
  points that Germany must agree to for the war to end
 Wilson was not interested in punishing Germany
 Rather, he wished to build systems and institutions
  that would provide a more peaceful future (e.g. The
  League of Nations)
 Germany was pleased with the 14 points and
  eventually surrendered under the impression that
  these points would be the basis of the peace treaty.
 The Paris peace
  conference is where
  the combatants met
  to create the peace
 However, the meeting
  was dominated by the
  French who wanted to
  forever destroy
  Germany’s ability to
  make war
Some important Articles of the Treaty include:
 Germany accepts all blame for the war
  (War Guilt)
 Germany would pay $32,000,000,000 in reparations
 Germany’s military is destroyed (no Aircraft, reduced
  Navy, 100,000 man army)
 Germany lost all colonies
 Germany lost almost 20% of its territory (to France,
  Poland and others)
 Rhineland (border with France) was demilitarized
 Saar Region (Germany’s richest land in terms of
  natural resources) was occupied by the French
   The Treaty was considered excessive by many
    at the time
   Germany was humiliated and economically
   Austria/Hungary was completely destroyed
   Italy received no benefit for its war efforts
    and fell into poverty
   Russia and Germany were both banned from
    joining the League of Nations
   It would have been very difficult for Germany
    to make repartitions payments even if their
    economy was healthy
   However, with no colonies and the loss of so
    much territory, Germanys situation was
    completely hopeless
   In order to find a way out of this situation, the
    new German government, began to print
    extra money to make the payments on time.
 Printing too much money
  and other foolish
  economic policies soon led
  to rapid inflation
 Inflation is when the prices
  of products rise
 The prices in Germany
  rose so fast that German
  money became
  completely useless
 Almost the entire German
  population became poor
  almost overnight
Items     1914    July    July    July 1923   Sept.         Nov.
                  1921    1922                1923          1923

1 kg of   $0.28   $2.64   $8.75   $22,500     $10,370,000   $470,000,000,000

1 kg of   $1.17   $28.00 $133.00 $112,000     $76,000,000   $5,600,000,000,000

1 Egg     $0.09   $1.60   $7.00   $4,000      $4,000,000    $320,000,000,000
10 Million Marks
4 Billion Marks
100 Gold Marks = 100 Trillion Marks
 The German rich did very well during inflation
 They bought up land, assets and expanded their
 The inflation cancelled out their debt
 However, lower and middle class Germans were
  completely destroyed – life savings were
 Employers could not keep up with the inflation,
  many stopped working as their weekly cheque
  would not be enough for a cup of coffee.
 Police and government officials stopped working
 The streets were run by gangs and groups of ex-
 Violence and crime were rampant
 Most transactions were from Trading or
 Communists and Right wing groups fought for
  control of the country and the hearts and minds
  of the citizens
 1923 Germany made our depression seem like a
   This terrifying environment was the perfect
    place for psychopaths and misfits to gain
   Those who promised revenge and the
    restoration of Germany’s greatness soon
    became national heroes
   The greatest of all these was . . .

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