Versailles reparations

As punishment for losing the First World War, Germany had to pay

massive reparations to the victorious sides.

£100 million per year was a huge figure that

would not have been paid off until 1986.

Reparation difficulties

Germany had also been badly damaged by war so

struggled to pay the reparations.

Equally, the loss of land and industry (part of the Versailles Treaty) made it

harder still.

Hyperinflation

Due to financial problems in Germany, in 1921

prices started increasing quickly. This made it

harder for people to afford basic items.

By 1923, these price increases had caused

hyperinflation.

Hyperinflation

Hyperinflation is where prices increase by a

massive amount in a short period of time.

In January 1922, an American dollar ($1) was

worth 80 German marks. By November 1923, $1

was worth 4,420 million marks.

Effects of hyperinflation

Hyperinflation destroyed lives. It wiped out people’s

savings, caused huge unemployment and left people unable to afford

items such as food or fuel.

Some people did benefit though by easily paying off

loans.

1929 Depression

Hyperinflation eventually ended and for a few years Germany was prosperous.

However in 1929 the Wall Street Crash led to

financial problems across the world, including huge

unemployment.

The Depression

In Germany the Depression (as it was

known) brought back huge unemployment. People

were scared of a return to hyperinflation.

Ultimately the government collapsed because of this.

Arguments for influence

The different economic crises of the 1920s caused German people to be very

angry with their government.

This persuaded many to back a different political

system to help them.

Arguments for influence

It is telling that Nazi support fell during 1924-1929, when the Germany

economy was strong.

Some historians claims that without the 1929 Crash, Hitler would never have

come to power in Germany.

Arguments against influence

Economic problems go back to the Treaty of Versailles;

without this, Germany would not have suffered

hyperinflation.

Then, even if the 1929 Crash had then still

happened, Germans may have been less fearful.