Title: How did the Treaty of Versailles lead to economic hardship and hyperinflation for the German economy? - eNotes.com
Headings: How did the Treaty of Versailles lead to economic hardship and hyperinflation for the German economy?
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How did the Treaty of Versailles lead to economic hardship and hyperinflation for the German economy?
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Content: Educators go through a rigorous application process, and every answer they submit is reviewed by our in-house editorial team. Greg Jackson, M.A.
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In many ways, the Treaty of Versailles was meant to be a punishment for Germany. In 1921, Germany was required to pay 6.6 billion British pounds in reparations. At the time, Germany was unable to pay this. The country's coffers were still empty, as a result of the expensive war which had ended only three years before. As a result of Germany's inability to pay these reparations, French and Belgian troops invaded the Ruhr Valley in order to seize raw materials and industrial centers which would serve as partial payment. They took control of mines and factories and requisitioned a large number of goods from this industrial region. German workers, acting under the instruction of the government, refused to cooperate with the occupying forces. This drove unemployment in the country up to about 23 percent. In order to further pay off their debts and support out-of-work Germans, the German government decided to increase its printing of paper money.