The Treaty of Versailles & The German Economic Collapse

1. The Causes of WWII Part 1: The Treaty of Versailles &The German Economic Collapse

2. The End of World War One • 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.

3. The Paris Peace Conference • 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

4. The Treaty of Versailles 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

5. The Effect of the Treaty • The Treaty was considered excessive by many at the time • Germany was humiliated and economically destroyed • 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

9. The German Economy in the 1920s • 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.

10. Hyperinflation • 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

11. German Inflation (Berlin Prices in German marks)

19. 10 Million Marks

20. 4 Billion Marks

21. 100 Gold Marks = 100 Trillion Marks

22. The Effect of Hyperinflation • The German rich did very well during inflation • They bought up land, assets and expanded their businesses • The inflation cancelled out their debt • However, lower and middle class Germans were completely destroyed – life savings were eliminated • Employers could not keep up with the inflation, many stopped working as their weekly cheque would not be enough for a cup of coffee.

23. The Effect of Hyperinflation Part 2 • Police and government officials stopped working • The streets were run by gangs and groups of ex-soldiers • Violence and crime were rampant • Most transactions were from Trading or Bartering • 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 picnic!

24. What’s next? • This terrifying environment was the perfect place for psychopaths and misfits to gain attention • Those who promised revenge and the restoration of Germany’s greatness soon became national heroes • The greatest of all these was . . .