German compensation

R

Robert

New member
Today I found out that Germany is actually still paying compensation for WWI, and will continue to do so until 2010. By the end of the 1920s, Germany was almost bankrupt and had to prefinance a great part of the compensation payments over bonds. Even though the original compensation demands were officially dropped in 1948, these debt obligations of the 1920/1930s compensation payments were turned into a debt of the German Republic in 1953 in a financial treaty. This payment was completed by annual rates until 1988. But by a clause which the allies enforced, additional compensation for the WWI debt became due after the German reunification in 1990 and is still being paid back until 2010.
 
Robert I had heard this, but do not have a source I can quote do you? I have looked a bit at these war loans that Germany used to pay for the war. The bonds were never repaid to the citizenship were they? Have you ever heard of anybody capitalizing even fractionally on one of these bonds?

The 65 million Germans had suffered over 2 million killed and over 4 million wounded. Germany had spent approximately $40 billion on the war, which had primarily been paid for by the bonds sold to the citizenship. The state went bankrupt, hyperinflation developed in 1923 and the loans were never repaid. The Treaty of Versailles was shoved down the throat of Germany in June 1919 after eight months of negotiation amongst the Allies. Germany lost 13% of the prewar territory, all of its colonies, and had a war indemnity of $33 billion to pay. The discontent of the German nation and its citizens paved the way for future national problems. Postwar writings tended to glorify the Army, blame others for failure, and developed the "stab in the back theory."
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Hey Joe,
I do not think any one would bother trying to collect on a German war bond, they were paid for with Marks, and were devalued so much that the entire total of the war loans would probably be valued in a few Reichs Pfennig, and even that currency is of no value after 1945. There were coupons from the war loans that were used as currency during the hyperinflationary period. Even in Austria, where inflation was not as bad, the war loans were made nearly worthless by inflation. For example the Krone was devalued to the point that 10,000 Kronen was worth 1 Groschen, and it took 100 Groschen to make a Schilling, in 1972 it took about 20 Schilling to make a US$.
It would be the same as trying to capitalize on the Confederate war loans.
Best wishes
Gsu
 
Robert I had heard this, but do not have a source I can quote do you?
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At first I just heard it over TV and then researched a bit. Finally I found out that it would have been much easier using Wikipedia. The corresponding German page has an englisch counterpart ("World War I reparations"), but this is not very detailed about the post-WWII development and also has some differences.

Anyway, the relevant part would be:
After Germany’s defeat in World War II, an international conference decided (1953) that Germany would pay the remaining debt only after the country was reunified. Nonetheless, as a show of continued self-effacement, West Germany paid off the principal by 1980. In 1995, after reunification, the new German government announced it would resume payments of the reparations. Germany will finish paying off the Americans in 2010[7] and the rest in 2020[8].

[7.] Findley, Carter Vaughn and J.A. Rothney. Twentieth Century World: 6th ed. Boston: Houghton Mifflin Company: 2006. Page 77.
[8.] Jörg Friedrich, Von deutschen Schulden, Berliner Zeitung, 09. October 1999
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The German pages state that the payment after 1953 was not at all free will, and that the negotiations were quite tought because Germany tried to lower the debt and particularly the Americans settled for a lower amount. The first payment in 1953 was 563 million DM which equaled about 3% of the German national budget at the time. After five years, the rate increased to 765 million. The reason why the payments started again after 1990 is that the allies used a territoral split of the compensation. But eastern Germany did not pay. Therefore, after 1953 western Germany had payed its part and now until 2010 has to pay off the remaining part for the previous eastern german state.
 
I had read a little about the post war payment's , but not anything about post second war continuing of these after .
Thanks for the article.
Mark
 
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