The French and Belgian occupation of the Ruhr, Germany’s major mining and industrial area, revealed the fragility of the postwar order. Most importantly, the economic crisis that followed eroded the foundations of the Weimar Republic.
“The military subjugation of the Ruhr Basin has claimed its first human life,” lamented the German Parliamentary President during the January 17, 1923 session. The French and Belgian occupying forces, continued the president, “must understand that the daily expansion of the occupation will not lead to greater reparations but to vastly greater hatred and exasperation.”
The War Reparations Dispute & Occupation of the Ruhr
The Treaty of Versailles required that Germany, as deemed the sole responsible nation for World War I, compensate the Allies for the damages inflicted by the war. In May 1921, during the London Conference, the Inter-Allied Reparation Commission set the sum owed by the Weimar government to 132 billion gold mark. The Commission also arranged a schedule of payments for the war reparations, according to which Germany had to pay an annual sum of two billion gold marks and a further “sum equivalent to [26] per cent of the value of her exports.” The first installment amounted to one billion marks and was due within twenty-five days from the Commission’s notification of the schedule.
On May 5, 1921, British Prime Minister David Lloyd George presented the German ambassador in London with a six-day ultimatum, commonly known as the “London Ultimatum.” If the German government refused to accept the proposed schedule of payments, the Allies would invade the Ruhr Valley. It was not the first time the Entente powers threatened to occupy German territory to enforce the 1919 peace treaty. In March 1921, French troops entered Duisburg, Düsseldorf, and Ruhrort to pressure the Weimar Republic to agree to the war reparations.
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Unwilling to yield to the Reparation Commission’s terms, Chancellor Constantin Ferbach resigned. His successor, Joseph Wirth, accepted the ultimatum and, along with Foreign Minister Walther Rathenau, implemented the so-called Erfüllungspolitik (Fulfillment Policy). Designed to prevent a foreign occupation of the Ruhr Basin, the Erfüllungspolitik aimed to demonstrate Germany’s good faith in the war debt payment. At the same time, it intended to prove that the reparations imposed by the victorious Allies went far beyond Germany’s financial and economic capacity.
Chancellor Wirth’s acceptance of the London Ultimatum provoked a wave of resentment in Germany, where the far-right parties accused the Weimar government of betraying the country. On June 24, 1922, Rathenau was murdered by ultra-nationalists.
The Crisis Builds: Inter-Allied Debts & the “Constructive Guarantees”
In 1922, as the Weimar Republic paid the first war reparations installments, Germany’s economic situation began to worsen. The mark, whose value had already decreased during World War I, continued to fall as the government printed more money to fund its peacetime economy. The French government accused Berlin of purposely causing inflation to persuade the Allies of its inability to meet the reparations figure set in May 1921.
The already delicate situation was further complicated by the issue of the inter-Allied debts. During the war, France (and most of the Entente powers), rather than implementing austerity measures at home, had borrowed large sums of money from the United States and Great Britain to finance its war efforts.
In the postwar years, the repayment of these loans caused friction among the Allies, with the American government repeatedly refusing to cancel the debts. On August 1st, 1922, the British government sent a note, commonly known as the “Balfour Note,” to its debtors (France, Italy, Yugoslavia, Romania, Portugal, and Greece) to inform them of its intention to enforce its “rights as a creditor.” To pay its debts, France mostly intended to rely on the reparations imposed on Germany.
As the economic situation worsened, Germany started to fall behind on its reparation payments and asked for postponements. The French government, also struggling to recover its economy, claimed that Berlin was acting in bad faith by faking its insolvency. In April 1922, the Treaty of Rapallo between Germany and Soviet Russia increased France’s fear for its security and the stability of the European order. In the following months, the Allies’ attempts to solve the reparations issue reached a deadlock. In July, French Prime Minister Raymond Poincaré, feeling isolated after his unsuccessful efforts to win Great Britain’s support, declared to the Belgian ambassador, “I will propose a moratorium subject to guarantees. If England refuses, I will act alone. The German industrialists conspire to destroy the mark. They hope to ruin France.”
In August 1922, Germany suspended its cash payments of the reparations installment and asked for more moratoriums. France refused to accept Germany’s requests without “productive guarantees,” meaning the raw materials of the Ruhr Basin’s mines. In December 1922 and January 1923, the Reparation Committee determined that Germany had defaulted on its delivery of timber and coal to France.
According to paragraph 18 of Annex II of Part VIII of the Versailles Treaty, in the event of “voluntary default by Germany,” the Allies had the right to take punitive measures, including “economic and financial prohibitions and reprisals and in general such other measures as the respective Governments may determine to be necessary in the circumstances.”
On January 11, 1923, five French and one Belgian divisions occupied Germany’s Ruhr Basin under the pretext of protecting the engineers and workers of the Inter-Allied Control Commission for Factories and Mines (MICUM) already dispatched to the region. The British government remained neutral.
The “Ruhrkampf”: Germany’s Passive (and Active) Resistance
The Ruhr Valley, a region east of the Allied-controlled Rhineland, was the heart of Germany’s industrial system. The coal and coke mines supplied raw materials to the metallurgical and heavy engineering factories. The Ruhr played a central role in Germany’s armament production during the war. The area was connected with the rest of the country by a network of railroads.
By taking control of the industrialized region, France had the double aim of exploiting the raw materials and high production capacity of the Ruhr’s mines and factories, as well as pressuring the German government into resuming the payment of the war reparations. The occupation of the Ruhr was met with a wave of collective indignation from Germans. As soon as the French and Belgian soldiers entered the region, the German workers spontaneously went on strike to oppose the occupation forces. Shortly after the beginning of the occupation, the Reich government, under Wilhelm Cuno’s cabinet, officially called for passive resistance in Ruhr Valley, thus abandoning its previous Erfüllungspolitik.
The passive resistance brought all activity in the Ruhr Basin to a standstill. Most importantly, the delivery of coal to the occupying forces was forbidden. At the same time, Berlin prohibited government officials from complying with the orders issued by the occupiers. The French and Belgian authorities responded by expelling around 16,000 uncooperative local civil servants from the region. In total, between 120,000 and 150,000 residents of the Ruhr Valley and the near Rhineland were deported for their role in the passive resistance.
The so-called Ruhrkampf (battle of the Ruhr) also focused on preventing the occupying forces from exporting coal and coke to France and Belgium. In the end, frustrated with the transportation blockades, the occupiers resorted to sending their own engineering teams to reactivate the railroads. The French and Belgians also imposed martial law in the Ruhr and closed the border between the occupied area and the rest of Germany, effectively stopping the deliveries of raw material across the country. As a result, Berlin was forced to import coal from Britain.
While the Ruhrkampf mainly consisted of boycotting the occupying forces’ orders, members of the far-right and the Freikorps, independent paramilitary groups formed by World War I veterans, occasionally sabotaged the French troops. The most famous episodes of active resistance were orchestrated by Albert Leo Schlageter, a member of the NSDAP who founded a Stoßtrupp (shock troop) to carry out attacks against the occupiers. The French and Belgian authorities responded to the violent acts with swift and harsh measures. The saboteurs were usually sentenced to death after being tried by a military court. Schlageter was executed in May 1923 in Düsseldorf. After his death, the Nazi party hailed him as a martyr for the National Socialist cause.
Economic Crisis and Hyperinflation
The occupation of the Ruhr and the resulting passive resistance had a disastrous effect on the German economy. The occupying forces’ blockade caused shortages of coal across the country. The result was a dramatic increase in prices. At the same time, the government began to print large quantities of money to cover the financial costs of the passive resistance in the Ruhr and Rhineland.
Toward the end of 1923, the value of the currency was in free fall. In November, the Reichsbank started to print 100-trillion mark banknotes. In the same month, one dollar cost 2.2 trillion marks. More than five thousand municipalities and companies decided to issue their own Notgeldscheine (emergency banknotes). The result was an unchecked hyperinflation that wiped out the entire savings of countless German families. On the other hand, some industrialists and financiers took advantage of cheap short-term credits to grow their wealth.
The newly printed banknotes lost value so fast that wages became worthless within days. “The piece of paper, the spanking brand-new bank note, still moist from the printers, paid out today as a weekly wage, shrinks in value on the way to the grocer’s shop,” observed with dismay Berlin journalist Friedrich Kroner. Some employers began to pay their workers daily. People rushed to the stores to exchange their money for goods as soon as possible. During the winter months, German families used their worthless money as fuel for the stoves. In many cities, fearing starvation, crowds of hungry people looted shops and rioted.
The Political Consequences of the Occupation of the Ruhr
The economic crisis and the ensuing hyperinflation led to social and political turmoil, with many Germans losing confidence in the Weimar Republic. As the country’s economy worsened, parties on the left and right organized demonstrations and revolts against the government. In June 1923, a nationwide wave of strikes broke out. The strikers occupied factories and demanded the resignation of Chancellor Wilhelm Cuno. On August 11, 1923, as the strikes continued to spread, Cuno stepped down. His successor, Gustav Stresemann, called off the passive resistance in the Ruhr and Rhineland on September 26, hoping to avert bankruptcy and the possibility of a civil war.
However, Stresemann’s decision initially led to a new wave of anti-government revolts. As inflation continued to rise, the Communists and the Social Democrats organized popular uprisings in Thuringia, Saxony, and Hamburg. Fearing a “German October” endorsed by Soviet Russia, the government, under Article 48 of the Weimar Constitution, declared a state of emergency and sent the army to suppress the revolts. In Rhineland, the separatist movement, supported by the French, established an independent Rhine Republic on October 21, 1923. However, the attempt failed as the separatists were unable to win the sympathies of the local population. A similar experience took place in the Palatinate, where the separatists founded an autonomous republic with the help of France.
In the fall of 1923, however, the biggest challenge to the legitimacy of the Weimar Republic came from the Bavarian far-right, whose leaders did not accept Stresemann’s decision to stop the passive resistance in the Ruhr. Between November 8 and 9, Adolf Hitler carried out a violent attempt at sizing power. Known as Beer Hall Putsch, his failed coup d’état should have been the first step in a nationwide attack against the Jüdisch-Marxistische Brut (Jewish-Marxist mob) in Berlin. While the Weimar Republic managed to survive the attacks, the socio-political crisis of 1923 irremediably weakened its foundations.
The Dawes Plan & the End of the Ruhr Occupation
On November 20, 1923, the Stresemann government introduced a new currency, the Rentenmark, to combat the rampant hyperinflation. The Rentenmark was based on mortgages on agricultural and industrial resources to stabilize its value. The plan worked, and the inflation finally stopped. However, Stresemann resigned after his opposers on the left and right issued a vote of no confidence against his cabinet. His successor, Wilhelm Marx, declared the end of the state of emergency at the beginning of 1924.
Though Germany’s economy started to recover at the end of 1923, the “cold war” with France in the Ruhr continued. When Stresemann ended the passive resistance, Poincaré, the apparent winner of the economic stand-off between Germany and France, opted to back the separatist movements in the Rhineland and Palatinate rather than enforce the payment of the war reparations the Weimar Republic had forfeited.
To solve the stalemate, the Reparation Commission, on the suggestion of the US and Great Britain, established a committee tasked with reviewing the issue of the war debts. Presided over by American banker Charles G. Dawes, the committee proposed to reduce Germany’s annual bills. It also planned to restore the country’s economic unity by introducing a new currency, the Reichsmark, and placing it under foreign supervision. Germany would also receive a substantial loan. In exchange, France would agree to leave the Ruhr Valley.
On August 16, 1924, the Allies and Germany accepted the committee’s plan, dubbed the “Dawes Plan.” In 1925, the last French troops left the Ruhr. In the same year, Germany celebrated the Rheinische Jahrtausendfeier (Rhineland’s millennium celebration). Berlin took advantage of the occasion to reaffirm the German identity of the area and organize an anti-French propaganda campaign.