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The net capital transfer into Germany amounted to 17.75 billion marks, or 2.1% of Germany's entire national income over the period 1919–1931. In effect, America paid Germany four times more, in price-adjusted terms, than the U.S. furnished to West Germany under the post-1948 Marshall Plan.
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. Between 1919 and 1932, Germany paid out 19 billion goldmarks in reparations, and received 27 billion goldmarks in loans from New York bankers and others.
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. This still left Germany with debts it had incurred in order to finance the reparations, and these were revised by the Agreement on German External Debts in 1953. After another ...
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 government of Adolf Hitler declared all further payments cancelled in 1933, and no further reparations payments were made until after the defeat of Nazi Germany in the Second World War. Germany finally paid off its debts under the Versailles treaty, which had been reduced by 50% at the 1953 London Debt Conference, in 2010. [157]
Estimated to have lost ¼ of its wealth during World War 1, Britain turned to welfare to spark an economic recovery. Reliant on receiving payments of war debts from Germany to stimulate economic growth after the onset of the great depression, the British economy suffered when the United States nullified these reparation payments.
Thus, when Germany could no longer afford war reparations to Britain, France and other former members of the Entente, the Americans came up with the Dawes Plan and Wall Street invested heavily in Germany, which repaid its reparations to nations that, in turn, used the dollars to pay off their war debts to Washington.
The first part of the conference, which met from 6 to 31 August 1929 in The Hague, showed that British-French solidarity on the reparations question had broken down.The British Chancellor of the Exchequer, Labour Party politician Philip Snowden, made three demands: deliveries in kind (such as coal) that affected British trade negatively would have to be limited; Britain would be entitled to a ...