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Economy in the Interwar Period

Emily Wilson

Emily Wilson

8 min read

AP World History: Modern - Post-WWI Economy & The Great Depression: Your Ultimate Study Guide πŸš€

Hey there, future AP World History champ! Let's dive into the economic rollercoaster of the post-WWI era and the Great Depression. This guide is designed to be your go-to resource, especially the night before the exam. We'll make sure everything clicks, so you feel confident and ready to ace it!

🌍 Post-WWI Economic Landscape: Treaty of Versailles & Its Aftermath

The Treaty of Versailles (1919) πŸ“œ

  • What was it? A peace treaty that officially ended WWI, but also laid the groundwork for future conflict.
  • Key Players: The victorious Allied powers (primarily France, Britain, and the U.S.)
  • Goal: To punish Germany and prevent future wars (Spoiler: It didn't quite work out that way!)
Key Concept

The Treaty of Versailles is a major turning point that directly led to the rise of extremist ideologies and WWII. Understanding its terms is crucial!

Terms of the Treaty:

  • Territorial Losses:

    • Germany lost all colonies.
    • Sudetenland went to Czechoslovakia.
    • Polish Corridor split Germany, giving Poland access to the sea.
    • Demilitarized Rhineland zone.
  • Reparations:

    • Germany had to pay massive war debts (132 billion gold marks).
    • Crippled the German economy.
  • Military Restrictions:

    • Limited size of the German military.
    • Banned production of certain weapons.
    • Disarmament of the German navy.
  • War Guilt Clause (Article 231):

    • Germany was solely blamed for WWI.
    • Fueled resentment and nationalism in Germany.

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Treaty of Versailles. Image courtesy of ThoughtCo
Memory Aid

Think of the Treaty of Versailles as a 'Versailles Vise' squeezing Germany: Territory, Reparations, Military, Guilt. (TRMG)

Immediate Post-War Economic Issues:

  • Weakened Europe:

    • Inflation and massive debts.
    • Dependence on loans from the U.S.
    • Loss of overseas investments.
  • Vicious Cycle of Debt:

    • Allied powers needed German reparations to repay their debts.
    • Germany took loans from the U.S. to pay reparations.
    • This created a fragile and unsustainable system. πŸ’‘
Common Mistake

Don't just memorize ...

Question 1 of 12

Which of the following was a direct territorial loss for Germany as a result of the Treaty of Versailles? 🌍

Alsace-Lorraine to France

Sudetenland to Czechoslovakia

Crimea to Russia

Constantinople to Turkey