He opposed the thoughts of Keynes based on previous predictions which proved false in the future. The war affected different sectors of Germany. Germany saw its steel output increase by around 30% and iron output increase by 38% from 1913 to 1927, contrary to Keynes prediction that it would decrease. Germany's efficiency in mining coal was also predicted to decrease, which proved wrong when the efficiency of labor increased by almost 30% from 1913 to 1929. It was also predicted that German coal exports would stop right after the treaty. However it showed a consistent increase to 15 million tons in the year following the treaty and rose up to 35 million tons in 1925. In a similar fashion, the German savings figure, which was expected to decline showed a steady increase. Mantoux demonstrated how Germany was in a position to pay according to the terms of the treaty, given that its expenses in rearmaments was close to 7 times that amount in the years following 1933. Keynes believed that compensating for the damages as per the terms of the treaty was next to impossible. Keylor, an American historian on the other hand calculated how increasing taxes and checking on the utilization of resources in the Weimar Republic would easily churn out the amount required to satisfy the debt of war reparation. Even thought this was one of the options, it brought on the possibility of a political crisis.
The compensation was divided in three parts as a, B and C. bonds. Out of these the C. bonds constituted the biggest portion. However it was mostly imaginary and was aimed at creating a false impression to the French that large amounts were going to be collected. The allies were looking to get the a and B. bonds. The combined amount of these bonds were almost 50 billion marks (where a kilogram of gold equaled 2790 marks), which was close to a slightly higher amount (51 billion marks) which the Germans had planned on paying. It was observed that Germany continued to submit all payments during the period when the Dusseldorf area came under French control in 1921. Things changed when they left its possession in the following year as they began delaying their payments. France and Belgium were planning on seizing Ruhr as a way to force the Germans to pay. Germany was declared to be in default on the December of 1922 by the Reparations Commission. This eventually led to Ruhr being taken over in the January of the following year. The Germans had failed to deliver the amount of timber that they were supposed to. It was obvious that Wilhelm Cuno, the government of Chancellor had stopped the delivery of timber as a way of assessing the eagerness of the allies to impose the clauses of the compensation in a situation when they were not being made. Things got worse when non-payments of coal continued in early 1923, a continuation of the over thirty instances of coal defaults which had occurred in the last 3 years.
The acquisition of Ruhr was in the least of the interests of the French Premier Raymond Poincare. It was the last resort which was undertaken when all other reasonable options were denied by the British. Poincare was against violence but had to encounter opposition. He saw the waste of potentially useful coal which could be used in French steel plants and finances which could be used to rebuild industries. He led the occupation of Ruhr himself on the 11th of January, 1923. The combined amount collected as a result of the Ruhr-Rhineland struggle crossed 900 million in golden marks. Germany considered this struggle as a way of protecting the clauses of the treaty of Versailles rather than an opposition to their defaults in coal and timber deliveries.
In an effort to compensate for the issues faces in the Ruhr, hyper-inflation was introduced by the German government which wrecked their economic situation in 1923. Historians have pointed out how the Germans were responsible for the way in which hyper-inflation affected them and how they favored that instead of coming up with payments. Even though it hampered their economy at that point, the hyper inflation coupled with the passive resistance implemented in Ruhr brought their situation on a global scale compelling the French to consent to the Dawes Plan of 1924. According to the conditions of the plan, Germany needed to pay around a billion marks...
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