The Treaty of Versailles

...and its devastating impact on Germany.

Having to wrongfully accept full responsibility for causing a devastating world war would have been bad enough, however this was only one of the many implications that Germany had to deal with after it, and the Allied Powers, after months of arguments and negotiations as to what it shall contain, signed the Treaty of Versailles on the 28th of June, 1919. In normal circumstances, Germany would have blatantly refused to sign such a treaty. However, towards the end of WW1, Germany’s military had all but disintegrated, leaving them in no position to continue the war, so she simply had no choice but to sign the treaty; or otherwise be invaded by The Allies. This treaty was designed to keep Germany quiet, by basically forcing her into isolation and making her weak so her once great power was now diminished. The treaty accomplished this quite successfully, however some countries such as France would have liked Germany destroyed, with the terms seriously damaging her economically, politically, socially, geographically and by putting great restraints on her military power. “To the German people they were being ruthlessly punished for a war not only were not responsible for but had to fight 1

When the German first found out what the Treaty of Versailles was to contain just weeks before it was to be signed, the government of that day actually refused to sign it, and out of great repulsion resigned. Therefore, a new government was formed: The Weimer Republic. This new government didn’t like what the Treaty of Versailles contained any more than what the previous government did, however they undoubtedly knew that there was no choice but to sign it. The politicians of the new government clearly knew that not signing the treaty would be suicidal for Germany. However what the government and society at the time believed were two different things, as the everyday citizens of German society were not told what the document contained. As a result, the signing of the treaty greatly weakened the new government’s public support and trust, as a powerful theory began to develop, fuelled by army leaders such as General Ludendorff, saying that the German people were stabbed in the back by politicians, and that the German army was still willing to fight on in the war. The “stabbed in the back” theory gained popularity as the government struggled to handle situations properly, such as the suffering economy. This lack of support by the public is clearly evident in early 1920, as The Allies put pressure on the German government to disband unofficial opposing forces, which were quickly growing in size as large numbers of angered ex army soldiers began joining. In March that year, the government attempted to follow the Allied Powers orders, however due to the lack of support from their own army, an opposing extremist group labelled the Freikorps marched into Berlin and declared a new national government. As you can see, due to the Treaty of Versailles becoming a symbol of Germany’s humiliation and defeat, and the “stabbed in the back” theory which had developed, not even the governments own army gave their full support, indicating that the signing of the treaty resulted in a devastating impact on the governments political representation to its own people.

Before the end of WW1, the German army was one of the largest, most powerful and feared in the world. However that all had to, quite embarrassingly, come to an end when the Treaty of Versailles was signed, as it contained terms which purposed to dramatically weaken the countries power. As a result, disarmament of the armed forces occurred, reducing the once powerful army from millions of soldiers to a measly 100,000. The armed forces were also no longer allowed to enforce conscription. No longer were they allowed to possess tanks, heavy artillery, poison gas supplies, aircraft or even airships. Even the German Navy was restricted; they were limited to 15,000 sailors, were no longer able to possess submarines and were only allowed to possess up to 6 capital naval ships. To the Germans, these standards were of great embarrassment and meant their military power was at a humiliatingly low level; so low that no other country would take them seriously any longer. With no military power to back them up, Germany was no longer able to take part in international relations, and in fact, in the event of an invasion, it would prove difficult to even defend herself. Germany, thanks to the signing of the Treaty of Versailles, had now been reduced down to somewhat of a Pawn; a state that could prove easy for other countries to manipulate or take advantage of.

Along with the terms of what Germany could and couldn’t possess military wise, came the terms which called for a ban on the exportation and importation of weapons and ships, which was a serious blow to the German economy as much of it was built up upon the production, and then exportation, of arms. The terms also demanded the surrender of 90% of their merchant fleet and thousands of railroad cars, which meant that even if Germany wanted to persist with trading, they simply couldn’t without difficulty. Major sections of the German industrial production had been seriously restricted, and that was just the beginning. The treaty also ceased commercial agreements between Germany and its former consumer markets, forbade access to Allied markets and even gave the Allies “preferred status” in Germany’s own crippled markets. This seriously damaged the countries economy, as now all they really had to rely on for wealth was the trading amongst their own market, and the little exports they were still allowed to proceed with. The treaty had just reduced Germany to a somewhat poor nation, and using other sections of the treaty, the Allies ensured that the German economy could not easily be revived to what it once was.

With the disarmament of Germany’s armed forces and import/export restrictions put in place, millions of German soldiers had now lost what was to some, their only source of employment, resulting in no income to feed, clothe or in severe cases, even house their families. However, soldiers weren’t the only ones driven into unemployment. As much of Germany’s economy was built up upon the production and exportation of arms, it wouldn’t be surprising to know that businessmen built great empires specifically producing goods for the armed forces. These business empires came crashing down as a result of the Treaty of Versailles being signed. As a company needs demand in order to produce, and in this case the great demand that was once there, now did not exist. This sent a cluster of workers into unemployment, and as both unemployment and business closure drastically rose, there was simply not enough employment to go around, leaving many families at the brink of poverty.

Included in the treaty were the great territorial losses that the country had to suffer, with Germany losing 13% of its land which contained approximately 6 million of its people. The terms instructed the return of Alsace-Lorrain to the French, West Prussia and Posen be handed over to Poland, and in result of votes in 1920-21, other areas were lost such as Eupen and Malmedy to Belgium and Upper Silesia to Poland. With the loss of these territories came the loss of some of Germany’s most mineral rich areas, including the Saar Basin and Upper Silesia. As a result of losing such territories, the German industrial production notably decreased; some of the worst effected including coal production, as a result of losing its richest coal territory, and steel production. In 1918, Germany produced 258,854,000 metric tonnes of coal, but after the Treaty of Versailles was signed, coal production fell to 180,474,000 metric tonnes in 1923. Steel production also reduced dramatically from 14.092,000 tonnes to 6,305,000 tonnes. Exporting minerals could be one of the keys to solving an economy crisis such as Germany’s, however by agreeing to the terms of the Treaty of Versailles, Germany signed away any viable chance to do so, seriously adding to the toll that their economy was already suffering.

One of the Allies most important goals was to isolate Germany from the rest of the world, and had already done so with major territory loss, import/export restrictions and terms which restricted Germany from joining with certain other nations. But to ensure this isolation, The Allies took control of all Germany’s overseas colonies, which took away any true worldwide support that the country had left. Germany could now only rely on itself for help; what was situated in the country’s territory itself was all they had, nothing more nothing less. The Treaty of Versailles had reduced Germany to a state of isolation the country had never experienced before, but they were forced to get used to it as the treaty was designed to ensure this state for as long as possible. 

If the importation and exportation restrictions and the territorial losses weren’t bad enough for the now crippled economy, the Treaty of Versailles also included terms that meant Germany had to pay reparations, or war damages, to the Allies, however, the Allies could not come to an agreement on a final amount so they asked for a 5 billion dollar down payment and then created the Reparation Commission, which was to decide on the final amount by no later than May 1st, 1921. The Germans were basically asked to sign a blank cheque at this time, signing away their financial freedom to the Allied Powers. “Perhaps no other political decision in German history had such tremendous impact on the financial and social security of the nation”2 . In May 1921, the Reparation Commission decided on the final amount of reparations to pay, which ended up being a great deal more than the original 5 billion, 27 billion dollars more in fact. The Germans now had a figure to pay the Allies that their crippled economy surely could not provide for. However as the Treaty of Versailles instructed such action, the government had to keep up with the reparation payments, which would generally prove difficult in the future.

As a result of losing 6 million of its people, Germany had lost 6 million potential workers, volunteers and most importantly, 6 million potential taxpayers. Taxes would have proved an easy target when it came to the government deciding how to pay reparations, but 6 million more people to pay them would have proved significantly easier for the countries people to handle. As the unemployment rate was rising which meant less money available to be withdrawn through compulsory taxes. And with 6 million people would have come business, farming produce and in general, some amount of money, which the government could have used to its advantage if it wasn’t for the Treaty of Versailles. 

Surely enough, Germany did in fact fall behind in their reparation payments, which resulted in French and Belgium troops marching in and taking over Germany’s most important industrial region, the Ruhr; the French were determined to get their money, and if cash wasn’t available, product would have to do. This action was completely legal under the Treaty of Versailles, completely legal to take away a revival source for an already seriously damaged economy. The German government attempted to respond to the actions of the French, by introducing a policy of passive resistance, where the Germans in the area had to refuse work if it meant money was going into the pockets of the French. However, this did not work as the government intended, as no produce was now coming out of the region whatsoever, resulting in Germany becoming even poorer. The German government simply did not have the money to cover the losses in the Ruhr region, so it decided to print more. Such a desperate act would have never been attempted by the government if it wasn’t for the Treaty of Versailles’s heavily restricted terms, which backed the government into a corner with no way out. This desperate act proved to be quite disastrous for Germany, as when money is printed off that the government does not have, the value of money goes down and prices go up; in this case, hyperinflation had occurred. In 1922, 400 DM was worth $1, in Nov 1923, 130,000 million DM was worth $1. The hyperinflation affected people in many different ways; however the worst hit were the middle class of society, who saw their savings and business’s destroyed. German exports were also ceased as the ability for other countries to pay for them was extremely difficult due to the economic crisis. Either way, the hyperinflation was another thing to damage the already crippled economy, which likely would have never have occurred if it wasn’t for the presence of the Treaty of Versailles; as it played a large role in the somewhat uneducated decision by the German government to print off more money.

On October 29, 1929, the Wall Street stock market collapsed, sending disastrous financial effects worldwide, particularly hard hitting Germany, who by this time was borrowing money from America in order to try and rebuild its industry and pay reparations. This idea was actually working and the German industry was picking up, sending exports worldwide which pulled in a steady income, until overnight these loans became due and these exports ceased, and the German industry came to a halt once again. Once again, millions of German workers became unemployed, life long savings of everyday people were destroyed, and people began living in poverty. Whoever you were in society, you were hit by the Great Depression, even the rich were hit, although probably not as badly, with businessmen watching as their company’s closed one by one. No matter what the situation was, reparations still had to be paid, which is why Germany struggled more than most countries to recover itself. If it wasn’t for these reparations, and the Treaty of Versailles in general, Germany could have recovered a lot quicker from the Great Depression, maybe once again becoming the great industrial leader it was; instead of becoming so devastated that homeless men stretched as far as the eye could see. “An almost unbroken chain of homeless men extends the whole length of the great Hamburg-Berlin highway. It is the same scene for the entire two hundred miles, and all the highways in Germany over which I travelled this year.”3


An overall sense of horrification, humiliation, bitterness, resentment and, as mentioned before, betrayal was cast over the German society in reaction to the Treaty of Versailles. No-one thought it was right that Germany should take full responsibility for starting World War 1, and as a result had to pay enormous reparations which made everyday life a struggle for many. It was this Germany-wide anger among the people that made them willing to unite under any leader that would go against it, a leader such as Adolf Hitler. You could say that the Treaty of Versailles paved the way for Hitler and the Nazi party’s eventual rise to leadership in Germany. In any other circumstance, it would have proved difficult for them to be elected with such extreme publicly known ideologies. Such ideologies included the idea that the human race was separated into different degrees, with the Aryan race being of the highest and the Jews being of the lowest degree. Such ideologies alone would never have won the Nazi’s power, but one thing which the party and the whole German society undoubtedly had in common was its hatred towards the Treaty of Versailles, which Hitler exploited to the highest level in order to gain as much public support as possible. So in effect, the Treaty of Versailles is in fact partially to blame for Hitler’s eventual rise to power. Without it, the public would likely never have adopted such extreme ideologies and voted for the Nazi Party come Election Day, which would give them the seats needed to eventually gain full power.

It is undeniable to say that the Treaty of Versailles did indeed have a devastating impact on Germany, in many different ways. The Treaty was designed to keep Germany weak, and did exactly this by severely damaging her economically, politically, geographically and by putting great restraints on her military power, and used measures to ensure that the country would not easily be able to recover. However, unpredictable circumstances also came away from the treaty, such as the rise of Hitler using his opposition to the Treaty of Versailles as an aid to come to power. Either way, the treaty forced millions of innocent people into constant suffering as a result of certain terms which led to the loss of millions of jobs, forcing many families to live on the brink, or at some times in, poverty as no steady income was available to them. These innocent people were being punished for a war they not only didn’t start, but also had to fight.


1 Walter S. Zapotoczny – The Treaty of Versailles and the Impact on Germany (

2 Sven Michael Olsen - Seeds of Weakness: The Impact of the Treaty of Versailles on the Economic Collapse of the Weimar Republic (

3 Heinrich Hauser, Source 4, Page 47 Germany 1918 – 1945 by Lacey Shephard

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