Treaty of Versailles - Modern Reappraisal

[Louis VI the Fat]

I completely agree that the German government caused the hyperinflation, but the fact remains that they did it because of (1) war reparations that they were either unwilling or unable to pay

It is this exact link that is the crucial point.

Not the reparations, but the German government created the hyperinflation. This they did to undermine the reparation payments. This is the pattern of behaviour of the German governments throughout the period, before and after 1933. Not the Treaty itself was the problem, but German obstruction, German refusal to accept concilliation efforts.

Spoiler Alert, click show to read: 

Sally Marks regards the reparations controversy as a battle over the postwar balance of power that Germany won. She declares the total figure of German reparations over many years as approximately 21.5 milliard gold marks (p.367--a milliard is the American billion; with approximately four gold marks to the dollar, her figure is somewhat more than $5 billion). As a reparations non-specialist, it appears to me that Sally Marks has largely won her thirty year war over reparations (She was not alone as scholars such as Marc Trachtenberg, Stephen Schuker, and others joined her on the same historiographical playing field). A significant caveat though: Marks and Gerald Feldman, who do not agree on much concerning reparations, are in accord that the reparations conundrum was a huge, costly mess that might have been avoided.

Sally Marks characterizes reparations as the "primary battlefield" of the postwar "continuation of war by other means" (pp. 338, 370; her first two forays into reparations are in Central European History, 1969 and 1978). Northeastern France had been destroyed, Germany had taken French factories and cattle into Germany, and retreating German Armies had flooded French coal mines. If France confronted domestic war debts, interallied debts, and reconstruction while Germany only faced the former, Germany would "reverse" its defeat. Reparations was a tug-of-war over the postwar balance of power. "For political reasons," the London Schedule of Payments of 1921 established an ostensible 132 billion gold marks figure for reparations but then deposited all but 50 billion gold marks in "never-never land" (p. 346). "Comparative moderation" was hidden "in apparent rigor" (p. 367). From 1919 until 1932, Germany only paid approximately 21.5 milliard marks (somewhat more than 5 billion dollars) (p. 367). Marks states, "A substantial degree of scholarly consensus now suggests that paying what was actually asked of it was within Germany's financial capacity" (p. 357).

It was not so much the plundering that was the impact, it was the failure to rejuvenate the nation afterwards. First, in WWI reparation were made in financial means which Germany could not afford, resulting in a collapse of the entire financial system. In WWII, reparations were made in movable and intellectual property, something which caused decreased output but did not fundamentally destroy the financial system. Second, after the WWII plundering, the US re-invested a huge amount of money in rebuilding the German economy. As a result of this Britain and France actively fell behind Germany, because their economies were heavily based on plundered German equipment and technology which was old and obsolete by the standards of the late 1940s. With American investment income, Germany was re-outfitted with the most modern machinery for industrial and technical production, which laid the ground work for the German economic revolution which has continued to this day. It is not coincidental that after WW2 Germany and Japan both became leading economic powers, while Britain and France lost much of their economic influence.

Whilst I agree that it is more profitable to fight against America than with America, I disagree this was much different in the 1920's.

The UK and France had to pay vast sums to America. Additionaly, France's north - her industrial and mining heartland - lay in ruins still. Both countries economies were in shambles. France never asked nor received reparations remotely sufficient to undo the ravages of WWI. Germany, by contrast, received more loans than it needed to pay for reparations. Despite Germany's sabotage of its economy, Gemany witnessed a period of massive growth in the second half of the twenties. Alas, it was all too shortlived. 1929 ended all of that.

I would like to point out that the [...] traditional view of Versailles from an economic point of view is also maintained in said book (as seen in Louis's latest post: Feldman and Ferguson agree Germany was unable to pay, and the reparations structurally weakened the Weimar Republic)

Feldman and Ferguson are shredded to pieces in the book by the other authors. (See spoiler above)They are rearguard, representing mostly obsolote views.

Ferguson in particular has the problem he agrees with the modern findings that Germany only ever had to pay 19 billion - a very modest sum. He has the additional problem that he maintains the (modest) reparations caused economical woes, while simultaneously stating that deliberate German policy was the cause for the hyperinflation of the 20's and the deflation of the 30's.


A kind of TinCow then.
Educated in older conceptions of Versailles, accepting of the newer findings, but not quite mentally ready to accept the full staggering consequences of it.