john s. gordon

Commodities Will Lead the Recovery - Matt McCall

sorry, got my facts & dates mixed up.

the versailles reparations terms were overly severe (this was the consensus reached later) & in 1923 germany was unable to continue the payment schedule as defined.

the franco-belgian response to this default was to send their troops into the ruhr industrial district & occupy the factories. the british government @ the time was not so sure that this was a good idea, since a german industrial collapse would have bad effects on the british economy as well. there were some reports of strikes & sabotage of equipment by the workers.

in response to the uproar, an international agreement was reached (the dawes plan) by which a relaxed schedule of payments was arranged combined with loans by the u.s.a to germany to keep the economy running. in 1925 the french troops were withdrawn. in the meantime amid the confusion hitler had attempted (unsuccessfully) to bring down the bavarian government.

it seems that the ruhr crisis was one of the causes of the inflation, but not the only one.
> jack

Commodities Will Lead the Recovery - Matt McCall

mchattie -

i wasn't there @ the time, but in 1930 when german industry's customers all over the world stopped buying goods because of the growing depression (triggered by the collapse of the Creditanstalt in vienna, & then the dominoes started falling) germany had no income with which to pay reparations.

at that point the allies (who had already prevented any german military presence west of the rhine) marched into the saargebiet (saar district) & occupied the factories. there are some good books on the subject & it is probably time for me to do some more reading.
> jack

Commodities Will Lead the Recovery - Matt McCall

mchattie -

weimar 1922 inflation had several causes:

the 1914 war was deficit-funded by credits voted by the reichstag on the assumption that germany would win & the losers would be required to pay the total costs of the war (this was the 1871 arrangement with france, and a repeat arrangement was assumed out of thin air).

punitive provisions of the versailles treaty, german industries had to manufacture goods for sale to other countries & then give the marks to france, belgium, england for reparations.

war loans by u.s.a to england, france were repaid until 1930 by the reparations money. u.s.a lent the money to german industries to enable manufacture of goods (a round robin, if you will). there has been no repayment by england, france since 1930. they english debt to u.s may have been officially forgiven (i'm not sure about this, maybe someone can provide). the french are still stiffing us.

inflation destroyed everyone's savings & insurance policies.

there was also hyperinflation in hungary.
> jack