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Rather, loans were taken out, placing Germany in an economically precarious position as more money entered circulation, destroying the link between paper money and the gold reserve that had been maintained before the war. With its defeat, Germany could not impose reparations and pay off her war debts now, which were now colossal. [116]
The British historian of modern Germany Richard J. Evans wrote that during the war the German right was committed to an annexationist program which aimed at Germany annexing most of Europe and Africa. Consequently, any peace treaty that did not leave Germany as the conqueror would be unacceptable to them. [194]
Germany agreed to pay reparations of 132 billion gold marks to the Triple Entente in the Treaty of Versailles. When Germany stopped making payments in 1932 after the agreement reached at the Lausanne Conference failed to be ratified, [ 12 ] Germany had paid only a part of the sum.
Of this figure, Germany was only required to pay 50 billion gold marks ($12.5 billion), a smaller amount than they had previously offered for terms of peace. [65] Reparations were unpopular and strained the German economy but they were payable and from 1919 to 1931, when reparations ended, Germany paid fewer than 21 billion gold marks. [66]
The reparations levied on Germany by the Treaty of Versailles were, in theory, supposed to restore the damage to the civilian economies, but little of the reparations money went for that. Most of Germany's reparations payments were funded by loans from American banks, and the recipients used them to pay off loans they had from the U.S. Treasury.
132 billion gold marks ($31.5 billion, 6.6 billion pounds) were demanded from Germany in reparations, of which only 50 billion had to be paid. In order to finance the purchases of foreign currency required to pay off the reparations, the new German republic printed tremendous amounts of money—to disastrous effect.
Germany also received a loan of 800 million gold marks, financed primarily by American banks. [33] [34] French troops leaving Dortmund. British Labour Prime Minister Ramsay MacDonald, who viewed the 132 billion figure as impossible for Germany to pay, successfully pressured French Premier Édouard Herriot into a series of concessions to Germany ...
On 11 January 1923, French and Belgian troops occupied the industrial Ruhr district east of the Rhine after Germany fell behind in the reparations payments required of it under the Treaty of Versailles. Military law was imposed, local governments were placed under French control, and the Inter-allied Control Mission for Factories and Mines ...