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Was hyperinflation caused by the treaty of Versailles?

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Introduction

Was hyperinflation caused by the treaty of Versailles? The treaty of Versailles was one of the five treaties that dealt with the defeated powers as well as being the most famous of the five and also became notorious for overall effects on Germany. Germany signed the treaty reluctantly and under mass protest due to the terms and conditions the treaty enforced on Germany and the effect it would eventually have on Germanys Empire and economy. The main terms were firstly the surrender of all German colonies as League of Nations mandates; the return of Alsace-Lorraine to France; demilitarisation and a fifteen-year occupation of the Rhineland. The demilitarisations didn't cease there as Germany was confronted with a limitation of 10,000 strong army with no conscription, no tanks or heavily artillery. ...read more.

Middle

The years of unrest included communist rebellions and a left and right wing divide. The reasons for discontent ranged, thousands of German people were poor and starving consequently poor living conditions led to an influenza epidemic - this killed thousands more people. The war victors and the consequences German was receiving led to mass objections in Germany as the majority of German population denied they had lost the war and blamed the 'November criminals' who had agreed to the armistice and the treaty of Versailles. The government was now seen as weak and ineffective as the treaty of Versailles made living conditions worse in Germany. Resentment was high and in 1923 Germany could not pay the second instalment of the reparations. A compromise was made so France and Belgium occupied the Ruhr (the richest industrial part of Germany) ...read more.

Conclusion

This method was chosen as Germany presumed and expected to win the war and make the defeated to pay for the wars overall cost - making borrowing more logical than taxing the German population. By making presumptions it made Germans loss more of a ordeal than it would have been if taxes had have been increased. Consequently the treaty of Versailles and the imposed heavy reparations therefore played a part in the spiral to hyperinflation yet were not solely responsible, as Germany had made the wrong monetary decisions in the beginning. The victors of WW1 who had imposed these reparations did come to Germanys aid as the currency was stabilized and inflation was brought under control in connection with the Dawes plan. The treaty of Versailles may have added to Germanys economic problems but it still rescued a failing and highly vulnerable weak country. On the other hand theses disruptions and troubles ignited new view points and political rebels began to emerge wanting change. Jennifer Grayson 10h ...read more.

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