The first debt settlement and revision of reparations, 1923–4

Abstract

The years 1923–4 were momentous for European reconstruction. The Franco-Belgian occupation of the Ruhr, and the German reaction to it, brought the mark to collapse and the German republic near to disintegration. The repercussions of the crisis spread far beyond the borders of Germany. France, the victor in the battle of wills, was herself weakened and failed to profit from the venture. The cataclysm at last brought American intervention and led to a new settlement of reparations and thence to a high level of United States involvement in European financial stabilisation and investment. The whole system of international credit got going again. It proved fragile, but at least gave a few years of greater allround recovery. In the events of 1923–4 Britain's part, although central, was not pre-eminent. In the occupation of the Ruhr the British government neither would take part nor could detach itself. In the settlement of the Dawes Plan British finance, in cooperation with United States money, could force an end to French predominance over Germany but could not itself have the last word. Anglo-American cooperation in European reconstruction had been desired in Britain since 1918. It was facilitated in 1924 by the achievement, after so much hesitation and soon after the start of the Ruhr occupation, of a settlement of the British war debt to the United States. That agreement in turn, after the reparation settlement of 1924, facilitated further debt agreements between both the United States and Britain and their respective European Allied debtors.