The Treaty Of Versailles And The Collapse Of The German Economy

1295 Words Dec 11th, 2015 6 Pages
On June 28, 1919, the Allied countries of World War I thought the storm of warfare had passed and ushered in a new era of everlasting peace, all because of one document- the Treaty of Versailles. However, the unforgiving reparations that the Allies imposed on Germany in Article 232 of the treaty contributed to the collapse of the German economy. The economic instability then created an environment that thrust Hitler into power, which ultimately led to World War II. When the Allies and Germany signed the Treaty of Versailles on that June day in 1919, Article 231 (the “War Guilt Clause”) made it clear that World War I was Germany’s fault. Furthermore, in Article 232, the Allies required that Germany pay “compensation for all damage done to the civilian population of the Allied and Associated Powers and to their property during the period of belligerency.” However, according to John Maynard Keynes, the treaty did not include “provisions for the economic rehabilitation of Europe.” He explained that Europe was not self-sufficient, and much of the population lived in compact industrial areas. Because of this, Europeans’ survival depended on coal, iron, transportation, and imported goods.
Unfortunately, for Germany, Article 45 in the Treaty of Versailles demanded that Germany surrender the coalmines in the Saar Basin as payment for the destruction of coalmines in Northern France. This was a huge blow to the German economy, in addition to the disrupted trade and…

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