Canadian History 1201 Germany After WW1: A Case Study March 2005

Germany Economic Problems….Inflation Political Instability Treaty of Versailles Depression & Unemployment

Economic Problems Germany borrowed $ to finance WWI instead of taxing citizens. Following WWI all govt income was going to pay off the debt. Govt printed $$$ to pay debt even though the economy was not expanding

Economic Problems Germany borrowed $ to finance WWI instead of taxing citizens. Following WWI all govt income was used to pay off the debt & reparations. Govt printed $$$ to pay debt even though the economy was not expanding Severe inflation occurred

Economic Problems Spring 1922…300 marks = 1 US dollar Early 1923…50,000 marks = 1 US dollar Germans soon needed billions of marks to pay for postage stamps Wages were often carried home in wheel barrels full of almost worthless paper money

Economic Problems People began to barter / trade goods/services instead of using money Paper money dropped in value forcing the German Govt to print paper money (over 300 paper mills working 24 hrs a day) ____________________________________ Page 193….picture & table

The rising price of bread in post-war Germany. 1918… 0.63 marks 1922… marks Jan 1923… 250 marks July 1923… 3,456 marks Sept 1923… 1,512,000 marks Nov 1923… 201, 000, 000,000 marks Severe Inflation…bread

1914… 0.90marks 1921… 1.60 marks 1922… 7 marks July 1923… 5,000marks Sept 1923… 4,000,000 marks Nov 1923… 320,000,000,000 marks Severe Inflation…eggs

I went into a café for a coffee. I noticed that the price was 5000 marks, which is roughly what I had in my pocket. I drank my coffee and read the paper. When I asked for the bill, it was 8000 marks. The value of the mark had fallen in the space of one hour! Memories of a German Writer Severe Inflation

Two women were carrying a laundry basket full of banknotes. They put the basket on the ground while they tried to buy something from a shop. When they got back, the money was still there, but the basket had been taken. Memories of a German Writer Severe Inflation

Economic Problems Define inflation -when prices for basic items (food, clothing) increases greatly while wages stay the same. What was the major economic problem Germany faced after the war? - Inflation Why did it arise? - German economy did not expand; govt used all financial resources to pay war debt & reparations.

Economic Problems How did the German Govt respond? - Opened paper mills to print more currency decreasing value of $$$$ Who would suffer most from inflation? -Workers, middle class, those with savings. Money became worthless to them Who might benefit from inflation? -govt workers, factories owners

Political Instability Following WWI, the main political parties in Germany were: 1.Communists 2. Social Democrats 3. National Socialists (NAZIS)

Political Instability Refer to page 194 of “Spotlight Canada” for a detailed description the main political parties, their main beliefs and their supporters. Review/discuss questions 1, 2, 3, & 4

Treaty of Versailles France 1919 Ended WWI Big Three Germans humiliated, (New territorial boundaries, War Guilt Clause, Reparations)

Versailles…Bad for Germany Germany lost rich areas of territory to France (coal fields, industry, etc..) Limited army of 100, 000 men; no air force, submarines, or artillery Required to pay $5 billion in reparations Lost colonies to Britain, France & Japan War Guilt Clause: Germans accepted blame for starting WWI

Depression & Unemployment Germans were greatly affected by the Great Depression US consumers were no longer in need of German products US banks could no longer lend the German govt & businesses money to rebuild from WWI German businesses went bankrupt & people lost their jobs

Depression & Unemployment German wages decreased steadily during the Great Depression Many unemployed barely survived People became very desperate 6 million unemployed

Depression & Unemployment Hitler & the Nazi party said……. “Believe me, our misery will increase! The government itself is the biggest swindler & crook. People are starving on millions of marks! We will no longer submit!. We want a dictatorship.”