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WWI: Finally peace!
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Why are people in Germany burning banknotes?
The world breathes a sigh of relief. Finally, peace! After more than four years of war, soldiers stop shooting each other. On November the 11th, 1918, an agreement is reached to cease fire. World War I is over.
Everyone is relieved that the war has ended. Now it's time to decide how the world will look after the war. Peace talks take place in the spring of 1919. Only the winners of the war are allowed to make decisions: France, Great Britain, the United States, and at first, Italy and Japan, but they later drop out of the negotiations. Germany is not allowed to participate.
It is primarily France, Great Britain and the United States that set the peace conditions. But these different countries have slightly different goals. France's Prime Minister Georges Clemenceau wants to be sure that Germany will never again be able to threaten France. He wants to destroy Germany economically and militarily. Britain and their Prime Minister David Lloyd George would like to continue trading with Germany, as they did before the war.
Therefore he would like Germany to recover. The United States and their President Woodrow Wilson agree with Britain. They do not think Germany poses a threat anymore, and like Britain, the United States would like to trade with Germany. On June the 28th, 1919 - exactly five years after the assassination of Archduke Franz Ferdinand - the event that triggered the war - the leaders of Germany and the Allies gather. They meet in the Mirror Room at the Palace of Versaille outside Paris to sign a peace treaty - the Versailles Treaty.
The place is carefully chosen. Right here, the Germans had proclaimed their emperor in 1871 after defeating France. The French experienced that as a humiliation. Now Clemenceau wants revenge! The war is blamed on the central European powers Austria-Hungary, the Ottoman Empire, and Bulgaria, but mainly on Germany.
Germany is accused of starting the war by attacking Belgium and France. The conditions of the peace treaty mean Germany loses large areas of land and all of its colonies. [2] Germany will also pay a huge war debt to the victorious countries. [3] It is decided that the German army, which consists of almost four and a half million soldiers, should be reduced to not more than one hundred thousand. [4] Germany is also forbidden to have an air force and submarines, and they must destroy almost all military equipment. [5] And German weapon production is to be strictly controlled by the Allies. The Versailles Treaty is unacceptable to many Germans, who think the politicians have cheated them. They also believe that Germany has not actually been defeated; it is just that the military forces have been withdrawn. Germany’s economy is in really bad shape.
The German government’s strategy for solving the problem is to print more money. The more banknotes printed, the less valuable they become. In 1922, a loaf of bread cost 163 marks. In autumn the year after, a loaf costs 200 billion marks. The strategy causes inflation - hyperinflation.
People are burning banknotes because it's cheaper than buying firewood. It doesn’t pay to work, and people's money in the bank is worthless. After the peace treaty at Versaille, Germany, which had previously been ruled by an emperor, is forced to form a democratic republic - The Weimar Republic, named after the city of Weimar. The Weimar Republic's first years are chaotic. Inflation, strikes, poverty, and hunger lead to several political murders and attempted ‘coups d’etat’.
Communists, Socialists, and far-right extremists fight openly on the streets. There is not only economic crisis in Germany, there is also political crisis. In this chaos in Germany, a new party is formed: the National Socialist Workers Party, NSDAP, the Nazi Party. Its leader, Adolf Hitler, will soon become one of the most famous, feared, and hated people in history.