Transcript The Economic impacts of the Treaty of Versailles

The Economic impacts of
the Treaty of Versailles:
Weimer Republic, Hyperinflation, The Dawes act, Ruhr
Crisis and the Locarno Treaty
The Treaties and Economics
 The Treaty of Versailles affected European economic
situations more by what it did not do, than by what it
did.
 It did not deal with any economic questions accept
reparations.
 It failed to deal with the issues of Allied war debts
Economic Disaster and USA

“Great Britain had lent millions of pounds to the Allies during the
war and had herself been borrowing heavily from America.... Mr.
Churchill went to the United States to discuss the war debt, pointing
out the economic chaos throughout the world which the payment of
these enormous sums of money would cause; but the United States
of America was adamant. 'They borrowed the money, didn't they?'
was President Coolidge's comment.

Great Britain had suggested an all-round cancellation of war debts,
but after learning of the United States insistence of payment she
declared to the Allies that 'she would collect no more from her
debtors, ally or former enemy, than the United States collected from
her'. At the end of the war, Britain owed the United States some
$4000 million. 'The enforcement of the Baldwin-Coolidge debt
settlement', wrote Mr. Churchill in 1948, is a recognizable factor in
the economic collapse which was soon to overwhelm the world'.
Mary Cathcart Borer, Britain - Twentieth Century
(1966)

Because America insisted that Britain repaying her war-debts to
America, Britain was forced to insist on the huge reparations
payments from Germany.
The Weimer Republic:
 In 1919 Germany became a democracy for the first
time.
 When Keiser Wilhelm II abdicated, the government
passed from Royal hands to an elected government
known as the Weimer Republic. Friedrich Ebert
made the 1st president of the Republic.
 Ebert was referred to as the “November Criminal”, “the
Enemy of Germany” and many other names for the
outcome of Germany at the end of the Great war.
The Weimer Republic continued
 In the Weimer Republic the German people voted for
members of Parliament to represent them in the
Reichstag (Parliament).
 The political party that gained a majority large enough
to win votes formed the government.
 The leader of that party became the Chancellor (Prime
Minister).
 To keep check on the actions of the new government, a
head of state (President) was elected. This person did
not run Germany on a daily basis that was the role of
the Chancellor.
 In 1933 Hitler took both the Chancellors and Presidents
position illegally.
Problems facing the Weimer
Republic
 The number of political parties in Germany made winning a
majority in the Reichstag, a virtual impossibility.
 Some parties included the SPD (workers), the KPD
(communists), the Zentrum (Catholics) and many more.
 When there was a vote to pass a law there were not enough
Members of Parliament to push it into action.
 A second problem was that the Weimer Republic was often
blamed for surrendering in 1918 and agreeing to the Treaty
of Versailles.
 They also faced strong opposition from Communists in
Berlin and right-wing, paramilitary groups such as the Nazi
party.
 Major economic problems facing the population.
The Ruhr Crisis
Ruhr Crisis (1923-24)
The Occupation of the Ruhr, by troops
from France and Belgium, was a response to
the failure of the German Weimar Republic to
pay reparations in the aftermath of World War
I.
 By late 1922, the German defaults on
payments had grown so serious and regular
that French and Belgian delegates were urging
the seizure of the Ruhr as a way of
encouraging the Germans to make more effort
to pay, and the British delegate urging a
lowering of the payments.

As a consequence of an enormous
German default on timber deliveries in
December 1922, the Reparations Commission
declared Germany in default, which led to the
Franco-Belgian occupation of the Ruhr in
January 1923.

Franco Belgium Occupation
http://www.jatsbulgaria.org/show.php?head=5&id=20&issue_id=2&type=article
Ruhr Crisis Cont.
French Prime Minister Poincaré decided to occupy
the Ruhr in 11 January 1923 to extract the reparations
himself.

Poincaré argued that the Germans could get away
with defying Versailles in regards to the reparations,
than a precedent would be created, and inevitably the
Germans would proceed to dismantle the rest of the
Versailles treaty.

Finally, Poincaré argued that once the chains that
had bound Germany in Versailles had been destroyed;
it was inevitable that Germany would once more plunge
the world back into another world war.

The invasion took place on January 11, 1923, with
the aim of occupying the center of German coal, iron
and steel production in the Ruhr area valley, in order to
gain the money that Germany owed. France had the
iron ore and Germany had the coal.

Passive resistance by miners
http://www.missouriwestern.edu/orgs/germanclub/inflation2.html
Hyperinflation in Germany
http://www.dailymarkets.com/economy/2009/05/27/blast-from-the-pastor-pictures-ofour-future/
Success found with Gustav
Stresseman
 Appointed chancellor from August 1923-November 1923
at which point he became the foreign minister until
1929.
 Despite the progress that was achieved in his time, the
Wall street crash of 1929 proved too detrimental for
democracy to survive in Germany.
Gustav Stresemann 1878-1929
THE FACTS
Stresemann was Chancellor in 1923 only.
His main role was as Foreign Minister from 1924
He was a right-winger and more able than Ebert
He built up Germany’s prosperity again although all of
Europe was recovering
He signed Germany up to the Dawes Plan in 1924
US aid to Germany
Foreign Policy
Stresemann showed real skill in foreign policy – 1925
1. Locarno Treaties – 1925
2. 1926 – Germany joined the League of Nations
3. Young plan - 1929
After a number of years in the wilderness Germany was
accepted back into the international community
Aristide Briand, Austin Chamberlain and Gustav
Stresemann signing the Locarno Treaty (1925)
http://www.spartacus.schoolnet.co.uk/GERlocarno.htm
Locarno Treaties
The Locarno Treaties were seven agreements
negotiated at Locarno, Switzerland on Oct. 5 – 16,
1925 and formally signed in London on Dec. 1, in which
the Western European Allied powers and the new states
of central and Eastern Europe sought to secure the
post-war territorial settlement, normalizing relations
with defeated Germany (which was, by this time, the
Weimar Republic).

Locarno divided borders in Europe into two
categories: western, which were guaranteed by
Locarno treaties, and eastern borders (of Germany),
which were open for revision.

The principal treaty concluded at Locarno was the
"Rhineland Pact" between Germany, France, Belgium,
Britain, and Italy. The first three signatories undertook
not to attack each other, with the latter two acting as
guarantors. In the event of aggression by any of the
first three states against another, all other parties were
to assist the country under attack.

Locarno Spring (1925)

The Locarno Treaties were regarded as the keystone
of the improved western European diplomatic climate of
1924-1930, introducing a hope for international peace,
typically called the "spirit of Locarno". This spirit was
seen in Germany's admission to the League of Nations,
the international organization established under the
Versailles treaty to promote world peace and cooperation, and in the subsequent withdrawal (completed
in June 1930) of Allied troops from Germany's western
Rhineland.
Other features of the Stresemann
Years
• Golden age of German cinema
• Night life, cabaret
• Removal of censorship
POSITIVES
n
e
• Unemployment and poverty still high
g
• Growing prosperity based on USA loans – at
iv
what would happen if USA wanted the
es
money back ?
Anything else?
 Stresemann wasn’t popular with either
the extreme nationalists like Hitler and
the Nazis, or with the Communists
 Hitler disliked the League because it
supported the Treaty of Versailles
 BUT both the Nazis and the
Communists made little progress in
these years because people were much
better off and their EXTREME ideas did
not appeal to people
Reading and Questions
 Read pages 60-65 and complete the source based
question on page 65.