Friday, November 12, 2010

World War I Finally Ends

Yesterday was Veteran's Day. But at one time it was called Armistice Day because World War I ended on Nov. 11, 1918. Once the war was over, the allies made Germany pay war reparations, which turned out to be fairly expensive. Just last month, they made the last payment. See Why Did World War I Just End? from Time magazine (Hat Tip: Devon of the The 1982 Topps Baseball Card Set blog). Here is an excerpt:

""Large parts of Belgium and France were so destroyed by trench warfare that they looked desolate, like moonscapes, just huge areas of land where nothing remained," explains Stephen Schuker, professor of history at the University of Virginia and author of American "Reparations" to Germany, 1919-33. "They needed money to help rebuild the area."

But how do you put a price on war? Is it the property value of destroyed buildings? Rounds of ammunition shot? The cost in human life? It took two years for the international Reparations Commission to assess damages in relation to Germany's national wealth — after all, the payment plan needed to be affordable — and decide how much the government owed. The first reparation demands were 266 gold marks, which amounted to roughly $63 billion then (close to $768 billion today), although this was later reduced to $33 billion (about $402 billion today)."

The economist John Maynard Keynes said this would cripple the German economy. The Germans simply printed money to pay the first installment. That lead to hyper-inflation. Charles Dawes, an American banker, came up with a plan to convert the debt to bonds. He won the Nobel Peace prize but not long after that Germany defaulted on the bonds. Then Hitler decided not to pay. In the 1950s, West Germany said they would repay the money if their country was ever again united. Well, the Berlin wall fall and in the 1990s they started paying again and finally made the last payment in October.

Here is the "Pepper ... and Salt" comic from the 11-11 Wall Street Journal.


Theresa Bruno said...

I didn't know that fascinating tidbit about Germany recently paying off its World War I debt and I'm an historian.

World War I (all wars in general) are not my specialty, but this week I have learned many fascinating things about World War I and veteran's day.

Nice Blog!

Cyril Morong said...

Thanks for dropping by and commenting. Glad you like the blog. I agree. This is a fascinating story. Is it true that Jane Austen was a baseball fan?