Now all roads lead to France and heavy is the tread
Of the living; but the dead returning lightly dance.
Edward Thomas, Roads

Sunday, October 30, 2022

When France Started Pressing for Reparations

Marshal Foch Was Outspoken at the January 1921
Conference with His Reparation Demands

At the end of the First World War, the victorious European powers demanded that Germany compensate them for the devastation wrought by the four-year conflict, for which they held Germany and its allies responsible. Unable to agree upon the amount that Germany should pay at the Paris Peace Conference in 1919, the United States, the United Kingdom, France, and the other Allies established a Reparation Commission to settle the question. By 1921 the contentiousness for both the Allies and Germany began reaching crisis levels politically due to demands made at an inter-Allied conference that opened in Paris on 24 January.

In Germany, by the fall of 1920, life was returning to normal, but the war's strain on the economy was apparent. And while unemployment was not a major issue, both the government and business community were anxious for the report of the Reparation Commission—the "butcher's bill"—due in the spring of 1921. Lord D'Abernon, the British ambassador to Berlin, warned the Allies that Germany would not be able to repay.

The Port of Duisburg Occupied by Belgian Troops
in March 1921

Adam Fergusson, historian of the Weimar Republic, describes what ensued:

France would not bend, though. [It was at] the Paris Inter-Allied conference, at the end of January 1921, where France, herself not far from insolvency, began making demands on Germany which D'Abernon described quite simply as 'amazing'. The figures that came out of Paris for German consideration, although nowhere near what the French had demanded, provoked shock in Germany...[By March,] France lost patience with the Germans and, by way of sanctions under the peace treaty, the Rhine ports of Duisburg, Ruhrort, and Dusseldorf were occupied by the Allies.

On 27 April, the commission set the final bill at 132 billion gold marks, approximately $31.5 billion. When Germany defaulted on a payment in January 1923, France and Belgium occupied the Ruhr in an effort to force payment. Instead, they met a government-backed campaign of passive resistance. Inflation in Germany, which had begun to accelerate in 1922, spiraled into hyperinflation. The value of the German currency collapsed; the battle over reparations had reached an impasse. It would be two years before the U.S.-sponsored Dawes and Young Plans would offer a possible solution to these challenges.

Sources: U.S. Department of State Website; When the Money Dies by Adam Fergusson

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