Source 1: Treaty of Versailles
When Germany lost World War I, they were forced to sign the Treaty of Versailles which imposed some very harsh punishments on Germany. The treaty required that Germany
- Give up territory
- Pay reparations
- Weaken the military
- Claim responsibility for the war
Source 2: Hyperinflation
In the 1920s, inflation in Germany was out of control. Inflation is a general increase in prices and a decline in the purchasing power of money. If a loaf of bread costs $3.00 in January and costs $4.00 in February, then inflation has happened. Inflation in Germany was so bad that it became known as hyperinflation. For example:
In 1914, one US Dollar was worth 4 German Marks.
1n 1923, one US Dollar was worth 260,750 German Marks.
Money became so worthless that people began to use paper bills for things other than purchasing. Here is a picture of a child flying a kite of money, because it cheaper to tape money together to fly a kite than it was to buy an actual kite with money.
Here is a picture of a woman loading money into a furnace to burn and heat her home because it was cheaper to burn money than buy coal.
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