November 11th 2010
After WWI France was left in ruins, it was no simply a matter of debt due to their military commitments but the infrastructure of much of the nation. The north of France had seen some of the heaviest fighting and France was struggling to rebuild. France was extremely paranoid about their security and maintained a standing army of 600,000 late into the 1920’s.
During the Paris Peace conference along with bringing Germany to its knees France also looked for reparations and land to stabilize their economy. France failed to have the Rhineland separated from Germany and did not crush Germany to a level she hoped for. The security France had hoped for at Versailles lay in ruins with America Withdrawing from Europe and Britain’s ever decreasing military support.
As stated in Morris and Murphy when Germany began to default on their payments it was not a question of morality or theory but national survival. Frances agreement to accept payment in raw materials helped although soon these payments also slipped. In 1922 two major events added momentum to the invasion of the Ruhr, firstly Raymond Poincaré was elected Prime Minister in January, secondly in November German-French relations erupted when Germany asked for a four year suspension on the payment.
This would bring the French to the tipping point, concerned with their economic recovery and increasing vulnerable security in January of 1923, with support from Italy and Belgium France crossed the Rhine and occupied the Ruhr with two goals. Continue reparation payments and gunpoint and increase separatism in the Rhineland. This would prove to be an extremely costly and unsuccessful answer to Frances problems.
Protests from the Germany people that the occupation was a breach of the peace treaty they implemented passive resistance bringing production in the Ruhr to a halt. France attempted to counteract this by bringing unemployed French and Belgium workers to take the jobs of the striking Germans although they proved to be substantially less proficient. Morris and Murphy explain that coal production dropped from 90 million in 1922 to 2.5 million in 1923. Moreover in 1922 70 iron smelting factories were operational whereas in 1923 there were only 3.
The economic gains were not valuable enough to justify the increasing political isolation France felt. The occupation was taking a huge toll on not only the German economy but the French and Belgium as well, bringing down the value of the franc, from 70 to the pound in 1922 to 240 to the pound in 1926. France desperately needed additional loans from America to continue although they did not come without terms.
America said they would give additional money although France must allow the Americans to draw up a new financial agreement and France must withdraw from the Ruhr and Rhineland. One year later after unsuccessfully continuing reparation payments or encouraging major separatist movement and with increased political isolation France halted the occupation. France wrote to the Italian minister that “she had committed the supreme error of polarizing against her the hostility of the patriotic elements in the Reich.
The American economist Charles Dawes would create the Dawes plan which would decrease not only the total sum of money owed by Germany but the amount due at each payment. This made it possible for the German economy to recover from hyperinflation and continue reparation payments. Many historians agree that the Ruhr crisis was a victory for neither side and cost both nations heavily along with spurring movements such as the Beer Hall Putsch with was the beginning of Hitler’s rise with would take off in the 1933.