Abstract
The First World War was characterized financially by a complicated web of loans between the Allied powers. At the end of the war (November 1918), total indebtedness amounted to around $21.6bn.1 The defeat of Germany was followed by huge reparations imposed on her by the victors. However, payment of reparations was closely linked to the settlement of the war debts, and the attitude of the Allied powers towards Germany was strongly influenced by their respective debit-credit positions. The United States had the biggest net credit position, followed by Britain. The American position was one of credit for $7.1bn, with a debit of just $0.4bn. The United Kingdom had lent $9.3bn to other Allies (mainly Russia, France and Italy), but also borrowed $6.1bn, mostly from the United States.
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