Assess the short-term significance of the Treaty of Versailles.

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Assess the short-term significance of the Treaty of Versailles.

Signed in 1919, the Treaty of Versailles remains a focal point in modern European history. When regarding Germany however, the Treaty retains even more significance. The Treaty affected Germany in more than one way. It had an effect politically, economically, socially and diplomatically and much of the transformation of Germany between 1919 and 1939 can be attributed to consequences of the Treaty of Versailles.

This is highlighted through the Occupation of the Ruhr by France and Belgium in 1922 in which, as a result of Germany not being able to pay another instalment in their reparation payments, France and Belgium invaded the Ruhr, Germany’s economic hub

 In accordance with article 231 of the treaty of Versailles, the Guilt clause, Germany acknowledged that they started World War one. Thus resulting in a payment of compensation to the Entente Powers. The payment of £6.600mill in reparations is what is argued to have financially weakened Germany’s economy. As the payments had to be made in hard currency, they could not be made by using the already devaluated papiermark. Therefore the Weimar government mass printed bank notes, buying foreign currency to pay the reparations. As the mark value dropped in international markets, the amount of marks needed to buy foreign currency increased. Despite international reparation conferences being held, no solution was reached, leading Germany into hyperinflation and ultimately rendering the mark useless as the exchange rate stood at 8000 marks to 1$. The worthlessness of the paper mark currency is shown in source 1 in which a man is using bank notes as wallpaper. This image presents how, under the Weimar republic, the currency has been made invaluable. It can also been interpreted to illustrate an increase in the cost of living as the price of wallpaper rose to such a high price that it was more efficient to use bank notes. However, the photograph can also be interpreted to

Firstly, the amount Germany had to pay in reparations was far beyond their financial capacity. For example; in 1922 Germany could not pay another instalment so France and Belgium invaded the Ruhr, the industrial heart of the German economy. This brought production to a halt. Consequently, this caused one of the worst cases of hyperinflation in history. The actual exchange rate stood at 4,200,000,000,000[1] Marks to $1 rendering money ultimately worthless.. It could be inferred that due to the rapid increase in the price of wood, money was of more relative value as a method of fuel than that of an instrument of buying and selling. The image may have been used simply for informative, journalistic purposes or it may have used as a method of propaganda to illustrate the ineffectiveness of the Weimar Republic. Count Brockdorff-Rantzau, leader of the German delegation to Versailles, predicted a more severe effect three years earlier. He said, ‘Those who sign this Treaty, will sign the death sentence of many millions of German men, women and children[2]’.. Referring to the harsh economic terms of the Treaty and making his stance on Versailles known to an unhappy German people, Brockdorff-Rantzau almost predicted the rapid decline in living standards and probability of death in Germany. However we must question his judgment and thus the reliability of this source as he would have had to be arguing for Germany to get the best possible deal or least harsh terms for Germany coming out of the negotiations

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Reparations as part of the Treaty of Versailles had another economic effect on Germany as they caused a massive increase in unemployment. Because of Germany’s inability to pay the reparations outlined in the Treaty of Versailles, she accepted loans from the USA to help repay them. These, also known as the Dawes Plan of 1923, would give Germany money to help repay France and Britain. However, when the Wall Street Crash devastated the global economy in October of 1929, USA had to withdraw these loans in order to service their own economy. As American money seeped out of Germany, ...

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