Occupation of the Ruhr

Occupation of the Ruhr Timeline

Background Germany's War Reparations

As part of the 'War Guilt' clause set out in the Treaty of Versailles, Germany was ordered to pay reparations to the Allies after its defeat in World War One. These reparations were heavy, amounting to 132 billion gold marks. These reparations were paid in a variety of ways - split between cash, gold and resources.

In a Germany whose infrastructure had been severely damaged during the war and was now economically crippled, this was an impossible sum to pay. By the end of 1922, Germany was frequently falling behind on payments or not paying this money at all.

Causes of the Occupation of the Ruhr

Raymond Poincare became both French Prime Minister and Foreign Minister on 17th January 1922. Like many of the French, he was strongly opposed to Germany after its invasion of France during World War One. The French government justified their invasion by arguing that the Treaty of Versailles has been violated.

At the end of December 1922, the reparations commission responsible for overseeing Germany's repayments declared that Germany had to default on deliveries of timber and coal. This default was used as the pretext for 60,000 French and Belgian troops to march into the Ruhr.

Invasion of the Ruhr

The French chose to invade the Ruhr because it was Germany's industrial heartland at this time. It contributed to 75% of Germany's coal and steel production. The Ruhr was located in west Germany, near the border with France and Belgium. They planned to take over the manufacturing plants in this area to make reparations in the form of goods.

The invasion was also made easier for the French as the area directly between France and the Ruhr area, the Rhineland, had been demilitarised by the Treaty of Versailles in 1919. This meant that there were no soldiers standing in the French army's way.

When the 60,000 troops entered the Ruhr, they took over factories, mines and railways, seizing food and goods from the native Germans.

The French troops were quite ruthless. They arrested any Germans who did not immediately cooperate and threw 15,000 Germans out of their homes. Around 100 Germans were killed during the invasion.

Fig. 1 - French soldiers in Dortmund, Germany

Passive Resistance of the Occupation of the Ruhr

The Germans were outraged by France's invasion. Those living in the Ruhr initially protested the occupation but were arrested by the French.

Despite having been told not to actively protest, the people of the Ruhr did not take the occupation lying down. Instead, they undertook passive resistance. This meant that instead of actively protesting the occupation, the German workers tried to slow down or stop production in the Ruhr. They did this by striking from work, turning up late, not being productive and even occasional sabotage.

However, because Germany's economy was already crippled because of its losses in World War One, passive resistance had dire consequences:

• The Ruhr's productivity fell dramatically. Germany suffered a shortage of raw materials and supplies. This led to a rise in the prices of everyday goods.

• This fall in productivity meant that the government collected less tax, reducing its national reserves.

• War payments to the French fell doubly behind, increasing tensions with France.

The Weimar government soon realised that its finances could not sustain a prolonged period of passive resistance. In 1923 the German Chancellor Gustav Stresemann called off the campaign of passive resistance.

End of the Occupation of the Ruhr

By the summer of 1923, it was clear that something needed to be done to end the occupation and restore Germany's economy. Germany was on the brink of economic collapse and ordinary Germans were suffering for it.

The Dawes Plan

The solution that was devised was the Dawes Plan. The Dawes Committee, consisting of economic experts from Allied countries and chaired by the American Charles G. Dawes, put forward a plan to solve the issue of Germany's reparations debt.

Fig. 2 - Charles G. Dawes

The Dawes Plan was put forward in August 1923. Its main points were:

1. All foreign troops would leave the Ruhr.

2. Reparations payments would be lowered to 1 billion marks per year, increasing to two and a half billion after 5 years.

3. The German National Bank, the Reichsbank, would be reorganised with Allied supervision.

4. Transportation, taxes on goods and customs duties were allowed as sources for reparations money.

5. Germany would be loaned around $200 million from the United States.

The Dawes Plan came into effect in September 1923 and effectively ended the French occupation of the Ruhr. The influx of American capital, as well as the restructured reparations payments, were life-saving for Germany, and the economy slowly began to rebound over the next two years. As the Dawes Committee said:

But the Dawes Committee's optimism would prove useless in just a few years. The Great Depression in 1929 and the rise of Hitler's Nazi party meant Germany would once again go down the path of war.

Consequences of the Occupation of the Ruhr

There were three important consequences of the Ruhr occupation.

Economic effect of the Occupation of the Ruhr

While the Occupation of the Ruhr did not cause the hyperinflation crisis, it certainly contributed to it. The extreme debts faced by the German government thanks to reparations payments and rebuilding after the war forced the government to resort to printing more money to pay their debts.

This was dangerous as the more money was printed, the less worth the money had. When the French took over the Ruhr, their economic problems increased, and more money was printed to try and keep the economy afloat. In November 1923, the hyperinflation crisis reached its peak.

The hyperinflation crisis was eventually stopped by the Dawes Plan and the introduction of a new currency called the Rentenmark.

The Munich Beer Hall Putsch

The Munich Beer Hall Putsch is infamous as an event that helped bring the Nazi party to recognition in Germany. The Beer Hall Putsch in 1923 was brought about by discontent and anger at the Weimar Government. For Hitler and his faction, the Occupation of the Ruhr was just another in a long line of failures by a weak government that should never have existed.

The Putsch serves as an example of the growth of political extremism, particularly on the right, as well as the dissatisfaction with the Weimar government that was felt by many during this period.

International Relations

The Dawes Plan of 1924 helped Germany's problems with reparations. The USA hoped that this assistance would help with finally restoring economic peace in Europe after WWI. It also allowed breathing space for Germany and ensured that Germany's currency would not be endangered by payments to foreign countries.