The treaty also attacked Germanys monetary stability by making German pay £6.6 million in reparations to pay for the death and destruction caused during WW1 in connection with the war guilt clause the treaty also implied. The above reparations eventually led to Germanys inflation and struggle to remain united and basically have a surviving populace.
Many had the opinion that the Treaty of Versailles was too harsh and unfair on Germany because as well as collective security there should have been an aspect of collective responsibility. The treaty of Versailles was meant to rebuild European trade and wealth, these hopes where destroyed because Germany could not afford to pay the reparations. The reparations Germany were forced to pay caused major problems and led Germany into a spiral of economic disaster. 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) to take resources directly instead of payment. This directly led to the up most fury in Germany and workers in the Ruhr refused to work. The government started printing money to pay the striking workers, the disruption meant that the German industry was devastated again, and as a result the economy plunged into hyperinflation. The three major results of the hyperinflation were that wages were paid twice a day before prices rose, the middle class lost out as bank savings became worthless therefore the German mark was completely worthless.
There was light at the end of the tunnel in the august 1923 when Stressmann became Chancellor, Germany gradually moved forward towards recovery.
Some say German hyperinflation was not caused solely by the treaty but was caused when Germany entered the war. German decided to finance the war by borrowing rather than increasing taxes. 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 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
