Why is the 1922 committee so named
Reparations (Weimar Republic)
by Helmut Braun
As compensation for the damage caused during the war, the victorious powers of the First World War demanded reparations from the German Reich as early as the armistice of November 11, 1918. The Versailles Treaty of June 28, 1919 stipulated these claims, the amount of which was to be specified by 1921. This failed, and the question of reparations gave rise to growing foreign policy tensions, which culminated in the Franco-Belgian occupation of the Ruhr in 1923 with its devastating domestic political consequences ("Ruhr struggle", hyperinflation, etc.). From 1924 onwards, the solution was gradually achieved via the conference route, first with the Dawes Plan (1924), then with the Young Plan (April 25, 1929). Since the Young Plan was also impracticable due to the global economic crisis that began shortly afterwards, the Lausanne Conference (July 9, 1932) agreed on an end to German payment obligations.
General starting point
The imposition of reparation obligations by the victorious power or powers on the defeated side in a war has a long tradition. The payment obligations imposed on the then defeated France by the newly founded German Reich after the war of 1870/71 were spectacular. It was therefore basically clear that after the end of the First World War the German Reich had to pay reparations to the victorious allied powers, including France. The only controversial issue could be the amount, type and distribution of benefits.
Basis of reparation claims
The American President Woodrow Wilson (1856-1924) demanded in his "14-point program" on January 8, 1918, well before the end of the war, the evacuation of the areas occupied by German troops and their restoration. On November 5, 1918, the term restoration was specified to the effect that compensation would be required for the damage caused by Germany in the war to the civilian population of the Allies and to their property. This interpretation now allowed the Allies to calculate the reparation amount in any amount without taking into account the performance of the German economy or the repercussions on the world economy. The claim for damages thus became a means of political power against the defeated German Reich, which was primarily to blame for the war.
The armistice and the first demands for reparations
According to the armistice agreement of November 11, 1918, material goods such as coal and operating materials had to remain in the areas to be evacuated by Germany; in addition, 5,000 trucks, 5,000 ready-to-use locomotives and 150,000 railway wagons had to be handed in immediately. Russian and Romanian gold as well as Belgian securities had to be refunded immediately and in Germany no public assets were allowed to be removed that could later serve as reparations.
The Treaty of Versailles (July 28, 1919) contained provisions on reparation in Section VIII. In order to justify the reparations, Germany had to recognize with Article 231 that, together with its allies, as the originator of the war, it was responsible for all losses and damage suffered by the Allies. This provoked particularly violent and long-lasting reactions from the German public ("war guilt lie"). Article 233 stipulated that by May 1, 1921, a reparation committee should determine the total reparation amount and the payment modalities for a so-called reparation period of 30 years. By then, Germany had to pay foreign currency and material assets amounting to 20 billion gold marks. In addition, all airships under construction and the existing airships had to be delivered, as well as the merchant fleet.
The reparations creditors and their interests
At the beginning of July 1920 the Allies agreed on the division of the German reparations payments: France should receive 52%, Britain 22, Italy 10, Belgium 8 and Serbia 5%, Romania, Portugal and Japan the rest.
Although this apparently resolved a major point of dispute within the victorious Allied powers, there were violent differences over the amount of the payments. The German offer of 100 billion gold marks contrasted with much higher demands from the Allies (July 1921: 269 billion gold marks, payable in 42 annuities).
The level of the reparation amount was also extremely controversial among the allies and experts: The "falcons" on the French side pursued with the reparation policy not only a compensation for the extensive war damage, but in particular an elimination of any future threats to France by Germany. The aim of English politics, on the other hand, was rather a pacification and stabilization on the European continent.
The example of the treatment of the German zeppelins also makes it clear that technology was also transferred to the victorious powers as part of the reparations payments.
The time of hardened fronts: 1920-1923
At various international conferences, in which Germany was again allowed to participate from July 1920, insofar as they did not concern the Allies alone, there were various proposals about the level and type of satisfaction of reparation claims. In contrast, Germany tried to show with the "fulfillment policy" that it was willing to meet the reparation claims, but that these were excessive and not realizable.
France, as the main creditor of reparations, increasingly relied on a massive demonstration of power, which in 1923 led to the French occupation of the Ruhr area, which the Anglo-Saxon allies rejected. As the reason for this sanction, France gave German misconduct in reparation payments due to incomplete deliveries of wood and coal. Due to the passive resistance against the occupation of the Ruhr proclaimed by the Reich government and its financing by the printing press with the consequence of hyperinflation in Germany, the French reparations policy based on threats and sanctions soon turned out to be the wrong path.
The Dawes Plan as a cooperative approach to solving the reparations question
From January 1924, under the chairmanship of the American banker Charles G. Dawes (1856-1951), a search for a viable solution to the reparations question began, which was carried out jointly by the Allied and German sides on the conference path and depoliticized by the delegation to experts. The Dawes Plan was supposed to take account of the change in the efficiency of the German economy as well as the balancing of the German state budget and the stability of the new German Reichsmark currency.
A reparation payment of one billion Reichsmarks was planned for 1924/25; by 1928/29 the amount was to increase to 2.5 billion Reichsmarks. The amounts were financed from the imperial budget and tradable bonds; In addition, there was a loan in the amount of 800 million Reichsmarks, especially signed by the USA. Foreign representatives sat in the Reichsbank directorate to monitor the stability of the new mark. In place of the previous Allied Reparations Commission, a newly established transfer committee tried to eliminate the problems with the transfer of reparations payments. The German trade surpluses, which would have been necessary in order not to finance the reparations at the expense of substance, did not materialize. The transfer problem thus remained in fact and could only be covered up on the German side by the massive debt abroad. Due to the high German interest rate level, American creditors in particular were happy to invest their money in Germany, but on the basis of short-term credit commitments. The central flaw of the Dawes Plan was that it did not determine the final total amount of reparations payments.
The Young Plan, the Great Depression and the Lausanne Agreement
In view of the dependence on foreign loans, the Reich government, which was already burdened by domestic political problems, aimed to reduce the annual reparation burdens. In addition, a final reparations settlement was also in the interests of the stability of the international financial system. Despite severe problems within the reparations creditors over the inter-allied debt settlement, the search for a final reparation solution resulted in the Young Plan of 1929, which an international group of experts under the American industrialist and politician Owen Young (1874-1962) had worked out. According to this, Germany was to pay reparations until 1988, around 2 billion Reichsmarks annually until 1966, the last 22 annuities were intended to cover interalled debts. Both the transfer committee of the Dawes Plan and the Allied controllers in the Reichsbank and the Reichsbahn were to be dropped.
This plan, which was adopted by the Reichstag on December 12, 1930, met with some massive rejection in the already polarized German domestic politics, with the National Socialists at the polemical point. Since the 2 billion annual reparation payments had to be raised in foreign currency, a foreign trade surplus had to be generated in the end - this could not be financed in the long term with foreign loans. This became impossible in the wake of the global economic crisis, which was already having a massive impact in Germany and which was quickly exacerbated with the withdrawal of short-term US loans; However, the consequences of the global economic crisis were still completely unknown when the Young Plan, which was so important for Germany, was accepted.
The Reich Chancellor Heinrich Brüning (Zentrum, 1885-1970), appointed on March 30, 1930, could therefore only have one goal, which other economic policy goals and measures had to serve: A demonstration of the German "willingness" to fulfill the Young Plan, coupled with an objectifiable "inability" to meet payment obligations. Brüning's goal was to achieve a final cancellation of the reparations due to the demonstration of the impossibility of providing them financially despite extreme willingness to make sacrifices. Since German foreign exchange was blocked by an egotistical policy of isolation and devaluation by the Allies, who were also shaken by the global economic crisis, Briining only had an extremely harsh deflationary policy for a credible demonstration of Germany's insolvency.
When the question of reparations came to a legal end with the Lausanne Conference on July 9, 1932 in return for a modest payment, Brüning was no longer in office because of his resignation on May 31, 1932. Now his successors, Chancellor Franz von Papen (1879-1969) and Kurt von Schleicher (1882-1934), could unjustifiably attach themselves to Brüning's success in eliminating the reparation question. The agreed final payment of three billion Reichsmarks was never made by the German side.
It should be noted, however, that the bonds raised by the German Reich, first to finance the Dawes and then the Young Plan, were again a subject of negotiation after the end of the Second World War as part of the London Foreign Debt Agreement in 1953. These bonds have been serviced again since then, with the repayment continuing until 2010.
The influence of the reparations question on Bavarian politics and economy
Although the reparations question and its solution represented an original problem of the German Reich, the consequences also had an impact on Bavarian politics and economy. The obligation of the armistice agreement to deliver locomotives and railway wagons affected not only the Reichsbahn but also the still independent Bavarian State Railways. The delivery of coal and the discontinuation of coal production in the areas to be ceded, as well as the traffic-related problems caused by the transfer of the railways, resulted in a massive coal shortage in Bavaria, especially in Munich. As a result of this lack of raw materials, production fell just as rapidly as, as a result, unemployment rose.
With the entry into force of the Versailles Treaty, the obligation there to deliver all aircraft and aircraft engines marked a further turning point. As a result, for example, Bayerische Flugzeugwerke AG (BFW), a well-known aircraft engine manufacturer, was forced to completely redesign its product range. From 1922 the company called itself Bayerische Motoren Werke (BMW).
The Palatinate, which had been occupied since the end of the war, was particularly affected by the Franco-German tensions of 1920-1923. At the same time, the "Ordnungszelle Bayern" under Prime Minister Gustav von Kahr (BVP, 1862-1934) became a rendezvous for radical nationalists who agitated against the "fulfillment policy" of the Reich government. The cessation of passive resistance against the occupation of the Ruhr on September 26, 1923, which was due to arrears in reparations payments, was a decisive stage on the way to the Hitler putsch on 8/9. November 1923.
There was further political turbulence as part of the Reich's acceptance of the Young Plan: Although the democratic parties approved the Young Plan, the Bavarian People's Party rejected it for primarily domestic political reasons, particularly in connection with an increase in the beer tax to finance the Reich budget deficit (BVP). But with this the BVP played into the hands of the agitation of the German Nationalists, the National Socialists and the Stahlhelm.
- Fritz Blaich, Black Friday. Inflation and Economic Crisis, Munich 3rd edition 1994.
- Winfried Glashagen, Heinrich Brüning's reparations policy 1930-1931. Studies on the economic and foreign policy decision-making process in the dissolution phase of the Weimar Republic, Diss. Bonn 1980.
- Bruce Kent, The Spoils of War. The Politics, Economics and Diplomacy of Reparations 1918-1932, Oxford 1989.
- Gerd Meyer, The reparations policy. Its external and internal political repercussions, in: Karl Dietrich Bracher / Manfred Funke / Hans-Adolf Jacobsen (eds.), The Weimar Republic 1918-1933 (Studies on History and Politics 251), Bonn 1987, 327-342.
- Hermann Josef Rupieper, The Cuno Government and Reparations 1922-1923. Politics and Economics, The Hague / Boston / London 1979.
- The expert reports, the reports of the two expert committees set up by the Reparations Commission of April 9, 1924 with all enclosures, Berlin 1924.
Recommended citation style
Helmut Braun, Reparationen (Weimar Republic), published on January 31, 2007; in: Historical Lexicon of Bavaria, URL: https://www.historisches-lexikon-bayerns.de/Lexikon/Reparationen_(Weimarer_Republik) (20.05.2021)
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