The Financial Cost of the War

Germany Pays

Warfare in the 20th Century was very costly in both human and financial terms. Great empires like England were on the verge of financial ruin. She had been forced to borrow large sums of money from America to continue the war effort. France suffered financial strain during the war and had to rebuild itself after, causing more economic hardship. These issues fuelled the drive to make Germany pay for rebuilding the economies of the victors.

To determine the amount that Germany was to pay, the Allied Repartitions Commission was established. They toured France, Belgium and parts of England to determine the damage done by the war. In April of 1921, the Commission announced the final bill that Germany was required to pay. The total was established at 132 billion gold German marks (a mark refers to the money used in Germany). The German government was to pay the debt off in 2.5 billion gold mark installments per year. The final payment was to occur in 1961.

Germany made its first payment in 1921, but by 1922 the economy of the country had collapsed and was facing hyperinflation. Inflation was so bad that a loaf of bread that cost 63 cents in German money rose to 163 marks per loaf and 201,000,000,000 marks a loaf. People were forced to take wheel barrels packed with money just to by a loaf of bread at the bakers.

With the collapse of the economy Germany asked for a three year break from payments. England agreed immediately, but France and Belgium need money to rebuild. France and Belgium then sent their armies into the Ruhr region of Germany and occupied the country. They began taking goods, coal and moved factories back to their own countries as payment. Actions like these would lead to future problems in Europe.