 France disagreed with Britain on how Germany should be treated after World War I.  France wanted to weaken the German economy through heavy reparations. ◦ France needed these reparations to pay back its debt to the United States. ◦ 132 billion gold marks were to be paid to the Allied powers.  France was afraid for its security. ◦ The Anglo-American Guarantee was denied. ◦ It did not want to be susceptible to future German attacks.

 Britain felt that Germany’s treatment at the Paris Peace Conference was too harsh.  The reparations that Germany was being forced to pay would cripple its economy.  Germany was the economic engine of Europe, therefore a crippled Germany would result in a weak European economy.  If the harsh treatment of Germany continued, it might become closer to Russia.

 Germany missed a shipment of timber as part of its reparation payments to France.  Despite British objections, France and Belgium invaded the Ruhr on January 11, ◦ The goal was to collect the missed reparation payments by force. ◦ Mines and factories were seized by French and Belgium troops.  German workers refused to co-operate with the French troops. Instead, they revolted against them. ◦ They destroyed mines, factories, and goods. ◦ Violence broke out between protestors and troops.

 The Weimar Government attempted to support its workers. ◦ It printed more paper money, which depreciated its value. ◦ Everyday goods cost billions of marks.  The middle class was hit the hardest. ◦ All of their savings were wiped out. ◦ They became cynical and pessimistic about the future. ◦ This led to susceptibility to extremists like Hitler.  The Allies saw that the German economy and government were close to completely collapsing. ◦ Collapsed Germany meant no reparation payments and a failing European economy. ◦ Anarchy could ensue, which could lead to the embrace of communism.

 During World War I, the exchange rate between the German mark and the U.S. dollar fell. By 1919, it was 47 marks to the dollar.  Reparation payments were to begin in June ◦ Payments were to be 2 billion gold marks, plus 26% of German exports per year. ◦ This led to rapid devaluation of the German mark to approximately 330 marks to the dollar by November  Germany began buying foreign currency, which increased the devaluation of the mark.

 By December 1922 the value fell to 8,000 marks to the U.S. dollar.  French and Belgian troops invaded the Ruhr – Germany’s industrial region – to collect reparations in the form of goods. ◦ The mark was essentially worthless at this time, so France was looking for another method of payment.  The inflation was aggravated when the Weimar government printed more paper marks to support its passively resisting workers.

A political cartoon showing the overprinting of marks during the Great Inflation. A chart showing the inflation of the German mark from the end of World War I to 1923.

 Gustav Stresemann was appointed as the Chancellor of Germany in  He implemented the Policy of Fulfillment. ◦ His goal was for Germany to reclaim a respected place in the world.  This policy supported German co-operation with the Treaty of Versailles. ◦ The goal was to receive concessions in the future from the Allies.  Passive resistance was called off in the Ruhr.  This policy was meant to show the Allies that Germany deserved a revision to the Treaty of Versailles due to its good behavior and co- operation.

 The United States was the wealthiest nation in the world during this time.  French and British debts to the U.S. were being paid back through the collection of reparations from Germany.  Charles Dawes developed a plan for economic relief.  The Dawes plan rescheduled Germany’s reparation payments. ◦ The deadlines were longer and the amount decreased. ◦ American capital went into German businesses and government bonds.

A diagram depicting the exchange of money in the Dawes Plan.

 The initial meeting took place in Locarno, Italy in September It was formally signed in London in December  It involved Germany, Britain, France, Belgium, and Italy.  Germany agreed to accept its borders with France and Belgium as permanent. ◦ The borders were to be guaranteed by Britain and Italy.  Germany was allowed to join the League of Nations.  Germany’s eastern borders were not fixed. ◦ Britain would not guarantee these countries. ◦ Germany agreed to seek border changes with Poland and Czechoslovakia through discussion instead of violence.

 This was a good opportunity for France and Germany to reconcile.  Germany could now rebuild its economy. ◦ It was not a threat to European safety.  Britain and France could repair their relations. ◦ Had drifted apart over the issue of the treatment of Germany.  The Locarno Treaty promoted optimism throughout Europe.  It inspired a spirit of co-operation and peace.

A cartoon by David Low showing Aristide Briand, Austin Chamberlain and Gustav Stresemann signing the Locarno Treaty (1925).

 Allied troops were removed from the Rhineland.  Allied supervision of German disarmament stopped in  Tensions between Germany and the Allies were on the way to becoming resolved. ◦ Germany was treated more like an equal and less like a criminal.  This provided an opportunity for France to repair its relationship with its former allies the United States and Britain.  Germany had a more active role in European politics through its membership in the League of Nations.  Peace in Europe seemed to be achievable.

 Under the Treaty of Rapallo, Germany was still co-operating with the Soviet Union. ◦ This meant that Germany could avoid its disarmament.  Germany’s eastern border with Czechoslovakia and Poland had not been fixed under the Locarno Treaty. ◦ Germany’s relationship with the Soviet Union was dangerous because the Soviet Union wanted to redraw the borders of Eastern Europe.  The League of Nations and collective security were not strengthened. ◦ In theory, peace could be achieved, but in reality it was not likely.