Germany's Economy After World War 1
Several factors contributed to making Germany more vulnerable to being
manipulated by someone like Adolf Hitler. Germany was economically devastated after their defeat in World War I. Because of the Versailles treaty, Germany lost a large portion of their land and was also forced to pay reparations to France and Great Britain.
Because German was blamed for starting the war, Germany was forced to pay 269 billion Marks in reparations, or roughly 32 billion dollars--a staggering sum. These reparations came in multiple forms, such as coal, steel, and agricultural products. Under the Versailles treaty, Germany was
forced to give up 13% of its land. In order to compensate for their losses,
Germany turned to the method social spending. To reach this
goal, Germany launched transportation projects, modernization
of power plants and gas works. These were all used to battle the
increasing unemployment rate.
manipulated by someone like Adolf Hitler. Germany was economically devastated after their defeat in World War I. Because of the Versailles treaty, Germany lost a large portion of their land and was also forced to pay reparations to France and Great Britain.
Because German was blamed for starting the war, Germany was forced to pay 269 billion Marks in reparations, or roughly 32 billion dollars--a staggering sum. These reparations came in multiple forms, such as coal, steel, and agricultural products. Under the Versailles treaty, Germany was
forced to give up 13% of its land. In order to compensate for their losses,
Germany turned to the method social spending. To reach this
goal, Germany launched transportation projects, modernization
of power plants and gas works. These were all used to battle the
increasing unemployment rate.
In addition, the rate of social spending was accelerating. In 1913
the government was spending approximately 20.5 marks per
resident; by 1925 it had risen to almost 65 marks per resident and
finally in 1929 it reached over one hundred marks per resident.
The money which was used for social spending combined with plummeting revenues caused continuing deficits. Eventually the municipal finance collapsed in 1930.
Germany was not able to make reparation payments because foreign countries had also placed protective tariffs on Germany's goods. Faced with reparation payments they could not afford, Germany began
printing exaggerated amounts of money. This threw Germany into a state of super inflation. Inflation reached the point where millions of marks were worthless. This, in addition to
all of Germany's other problems, caused the German economy to collapse.
Economic dislocation from World War I along with the destabilization of the economy brought on by war reparations meant that the governments of the Weimar Republic were always short of money. Nor was there money
for modernization, which made more urgent by the reduction in opportunities for advancement and appointments
brought on by the influx of policemen from territories ceded by Germany to neighboring countries after World War I. With Germany at its weakest and most vulnerable point, Hitler took the opportunity to begin his ascent to power.
the government was spending approximately 20.5 marks per
resident; by 1925 it had risen to almost 65 marks per resident and
finally in 1929 it reached over one hundred marks per resident.
The money which was used for social spending combined with plummeting revenues caused continuing deficits. Eventually the municipal finance collapsed in 1930.
Germany was not able to make reparation payments because foreign countries had also placed protective tariffs on Germany's goods. Faced with reparation payments they could not afford, Germany began
printing exaggerated amounts of money. This threw Germany into a state of super inflation. Inflation reached the point where millions of marks were worthless. This, in addition to
all of Germany's other problems, caused the German economy to collapse.
Economic dislocation from World War I along with the destabilization of the economy brought on by war reparations meant that the governments of the Weimar Republic were always short of money. Nor was there money
for modernization, which made more urgent by the reduction in opportunities for advancement and appointments
brought on by the influx of policemen from territories ceded by Germany to neighboring countries after World War I. With Germany at its weakest and most vulnerable point, Hitler took the opportunity to begin his ascent to power.
©Navdeep Kaur