A Flawed Peace:

Economic Effects of the Treaty of Versailles

But first… some history
 Post-WWI German Government
• End WWI Germany- chaos
– Kaiser William II stepped down
– Treaty Versailles signed under protest

• New constitution signed in city of Weimar-

create of Weimar Republic.
– Parliamentary government with prime minister
– Weak-
• Many political parties in Germany
• No democratic experience/history in Germany
• Many blamed this new government for defeat,
Treaty of Versailles and current life in Germany
• Many wanted another strong leader like a Bismarck

• Others looked for scapegoat

– Many accused Jews of imaginary conspiracy to
betray Germany
 But life was actually OK
• German bars, night clubs,
movies all thrived.
– Angered Hitler
• Not traditional German culture

• America tries to help

Germany from crumbling
– 1924- Allies lessen the
reparation amounts
– Dawes Plan
• France leave Ruhr Valley → Germany
• $200 million American loan to Germany
to help with repartitions
 Great Depression
• 1920’s – American economy sustains
world market
• If it fell, so would the world's
• 1929, it did → Great Depression
– (uneven wealth distribution,
overproduction of goods and food, stock
market crash)
• America’s response
– High taxes on exports to support
“buying American”
– Demanded repayment for loans to
European countries
– Germany and Austria no longer
receiving loans from U.S.
• Hurt other countries’ economies
– World trade drops 65%
– German/Austrian economies collapse
 Let’s just print lots of money!
• 1923- Germany falls behind on reparation payments
– So Germany printed more $$
• Did not want to increase taxes
– German mark loses value!!

– 1918 cost of bread- > 1 mark

– 1922 = 160 marks
– 1923 = 200 billion marks!!

– People bought food with wheelbarrows of $

– German’s life savings become worthless
How do you think this affected the
German people’s views of
democracy?
 Extreme Solutions
• In response, some countries turn to Fascism to
solve their social, political and economic
problems…..
 Reflection
1. How did the Great Depression make Hitler’s
Nazi Party more appealing to the German
people?
2. Would Hitler still have been successful
without it?
 Stop
• World Wars Rising Threat
 Italy: Post WWI
• Italo Balbo, Italian citizen, WWI veteran:

“I hated politics and politicians, who, in my

opinion, had betrayed the hopes of soldiers,
reducing Italy to a shameful peace… better to
deny everything, destroy everything, in order
to rebuild everything from your foundations.”

• How does this reflect post-WW1 Germany?

 #PostWWI Problems
• Italian nationalists were outraged by
the Paris peace treaties.
– Expected to gain territory
– Yugoslavia and others
• Didn’t

• Economy suffered
– Returning veterans faced
unemployment
– Trade down
– Government increased taxes

• Italians viewed democracy as

hopeless.
– Wanted strong leader to solve
problems
 Force: Benito Mussolini
• Mussolini becomes known as El Duce
– “The leader”

• Abolished democracy
• Censored press
• Banned other political parties
• Organized supporters into combat
squads
– Black shirt gangs
– Attacked/jailed opponents

• People accepted this because also lost

faith in government
 Rise of Benito Mussolini
• New young speaker – Benito Mussolini
promised to revive Italy

• 1919- Organized veterans and other

discontented Italians into Fascist party.

• Popularity grew
– 1922- 30,000 members marched to
Rome.
– Demanded Mussolini be put in charge of
government.
– King Victor Emmanuel III agrees
• Fearing civil war
• No bloodshed
• Great Speaker
– http://www.youtube.com/watch?v=ciQ6
MGU4GV8
 Strengthening the State: Benito Mussolini
• Economy: Under state control
– Allowed capitalism

• Men: Ruthless Warriors

– “A minute on the battlefield is worth a
lifetime of peace.”

• Women: Win battle of motherhood.

– Above 14 kids = medal by Mussolini himself
– “Machines and women, the two greatest
causes of unemployment.”
– gold wedding bands to treasury →iron
• Symbolized contribution to stronger nation

• Young Fascists: strict military discipline,

glories of ancient Rome, nationalism.
– Hymns- Mussolini is always right
Post WWI Germany and the Rise of
Adolf Hitler
 Hitler Background
• Soldier in German army WWI
– Twice awarded Iron Cross, bravery

• 1919: Creates right-wing extremist group

– National Socialist Workers Party, Nazi
– Called the fuhrer ( Fyoo rurh), leader

• “Storm Troopers”
– Private militia
• Like Mussolini

• 1923- Failed takeover in Munich

– jailed
• Wrote Mein Kampf in jail
– Germans= master race
• Aryans or light skinned Europeans
• Enemy= Jews
• Germany didn’t lose WWI
– betrayed by Marxists, Jews, corrupt leaders
• Germany needed more land to expand
 Hitler Rise to Power
• Great Depression=
Unemployment
– Nazi membership soars to
almost 1 million

• Hitler rises to power

– Promised to end reparations,
create jobs, rearm Germany
– More Nazis win seats in
Reichstag or lower house
– Decided to make Hitler as
chancellor to appease him.
• Legally elected
– Like Mussolini

http://www.youtube.com/watch?v=a2YEUhHFMHY
 Third Reich
• Third Reich or Empire
• First- Holy Roman Empire
• Second- Bismarck (1871)

• Boasted Third Reich

– Germans = master race for
next 1000 years
– “Today Germany belongs
to us, tomorrow the
world.”
 Rule Under Hitler
• Hitler’s Germany
– Suspends civil rights
– Destroyed other parties
– New flags with swastikas
– Purged political opponents
– Controlled all aspects of German life
• schools, government, religion
– Secret police called Gestapo or SS

• Few people worried, cheered

accomplishments
– Unemployment
– reviving German power
 Social Reform under Hitler
• Purge or purify German culture
– Denounced modern art and music
• corrupted by Jews
– Glorified old German myths
– Textbooks rewritten to reflect Nazi
views
– Public book burning bonfires
– Closed Catholic schools
• Single Protestant church
– Youth pledged loyalty
– Women rewards for numerous
births
• increase in master race

“We teach and learn history not to say how

things actually happened but to instruct the
German people from the past.”
 Economic Reforms
• Public works:
– highways , housing, forests

• Increased and rearmed military

– demand for hardware
• stimulated business

• Allowed capitalism but brought

big business under government
control.
– like Mussolini

• 1936: Unemployment 6 million →

1.5 million
 Other European Countries Fall to
Dictatorships
• 1919- Hungary
• 1926- Poland
• Eventually… Yugoslavia,
Albania, Bulgaria,
Romania
• By 1935, Czechoslovakia
was the only democracy
in Eastern Europe!

• Democracies- Britain,
France, Scandinavian
countries
Stop