The Reich’s enemies knew perfectly well that before the war Germany had needed to import large quantities of food to supply her population. It became clear that the Entente’s (and especially Britain’s) intention was to bring about Germany’s defeat at least in part by a policy of deliberate starvation. The German civilian population was quite specifically targeted. As Britain’s most senior defence official, Maurice (later Lord) Hankey, asserted in a confidential memorandum from the summer of 1915, ‘Although we cannot hope to starve Germany out this year, the possibility that we may be able to do so next year cannot be dismissed . . .’3
That the Entente blockade killed large numbers of Germans directly or indirectly, there can be little doubt. The suffering increased as the years went on. It was estimated that in 1915 some 88,000 German civilians died of causes attributable to the blockade, and in 1916 around 121,000. The months straddling 1916-17 were known as the ‘turnip winter’, because of the lack of protein and other vital foodstuffs available to the German population – especially in the country’s cities. By the end of the war the total number of victims was thought to have reached more than 760,000.4
In the city of Düsseldorf, in the northern Rhineland – its adult population a mix of white-collar officials and industrial workers – staples such as potatoes were often unavailable for months at a time.
In 1916, the shortage of fats began in earnest. Legumes such as lentils, barley and peas were available only rarely or not at all. By 1917, ‘war coffee’, which contained no real coffee at all, was the only kind for sale. The city officially allotted one egg to each adult every three weeks, but did not always have them to distribute. All kinds of cheese were scarce; dried fruit was not to be found. The only type of food available steadily in Düsseldorf was vegetables, and the kind and quantity depended on the season.5
By 1917 the diet of the average industrial worker in Düsseldorf compared very unfavourably, as regards both quantity and diversity, with that provided to an adult male in the pre-war poorhouse in the city of Hamburg.6
Germany’s inability to trade meaningfully also reflected her inability to participate in what was left of the global financial system. Britain and France could continue, to some extent, to import and export, and to raise money for the war through borrowing on the international markets. In the four years between 1914 and 1918, Britain earned £2.4 billion from shipping and other ‘invisible’ sources, sold £236 million of its foreign investments, and borrowed almost £1.3 billion abroad.7 Before August 1914, Germany had held overseas investments of between £980 million and £1,370 million in countries with which she later found herself at war. At least 60 per cent of these were subjected to outright confiscation.8 Moreover, unlike Germany, Britain and France remained in possession of large overseas empires. This meant that they could also make good any shortfalls in domestic food supplies, as well as calling on vast extra material resources and manpower.
After the failure of early attempts by Germany to raise funds on the New York financial markets, it became clear that by contrast the Reich stood alone. Again, though Britain also had to raise vast sums of money for the war, the capacity (and willingness) of the City of London, the world’s greatest financial centre, to absorb far greater quantities of short-term ‘floating’ debt than the comparatively tiny German money market, gave it a vital advantage, in particular lessening the inflationary effect of such borrowing on the general economy.9
True, Germany managed to raise £147 million through sales of foreign securities. All the same, the vast majority of any money required to cover the immense cost of waging war on such a scale, and for the kind of duration now expected, would have to be raised from among Germany’s own citizens by various means, including the sales of long-term interest-bearing war bonds, as well as increases in existing taxes and the levying of new ones. This created a burden of debt that would haunt the country for many years to come. There was also, as we shall see, the hidden time bomb of the vast loans taken out by Germany’s municipalities to cover their wartime expenses, which, since German law devolved such responsibilities, included vastly increased welfare expenditure for victims of the fighting, their families and dependants.
It was a daunting prospect. But Germany’s rulers – and most of the country’s citizens – expected that such outlay, however burdensome, would be merely temporary. When the Reich finally won the war, so the nation assumed, these expenses would be recouped from the losers – Britain, France, Russia and their allies. On 20 August 1915, the conservative-nationalist Secretary of State for the Treasury, former chair of the board of the Deutsche Bank and later Reich Vice-Chancellor, Dr Karl Helfferich, openly declared as much to an enthusiastic Reichstag:
Gentlemen, as things stand, our only way through remains to postpone the final regulation of war costs through the means of credit, to a future time when peace is concluded, until we are at peace. And on this subject I should today like once more to emphasise this: If God grants us victory and thus the possibility of shaping the peace according to our needs and the necessities of our national life, we intend and are entitled, along with everything else, not to forget the question of costs.
[Lively agreement]
We owe this to the future of our people.
[Calls of ‘very true!’]
The entire future maintenance of our life as a nation must, insofar as is at all possible, remain free of, and be relieved of, the enormous burden that the war has caused to accumulate.
[Further calls of ‘very true!’]
It is the instigators of this war who deserve to bear this lead weight of billions.
[Calls of ‘quite right!’]
Let them drag it through the decades to come, not us.
[Calls of ‘very good!’]10
Of course, Germany’s enemies believed exactly the same. In the case of France and Belgium, they also fully intended to seek compensation for physical damage inflicted on their territory as a result of fighting, and the activities of German occupation forces.
This last imposition, should Germany in fact lose the war, was going to be extremely onerous. Except for a brief though violent Russian incursion into the easternmost part of Germany in the first weeks of the war, and some fighting in the border fringes of Alsace and Lorraine, the Reich’s territory remained untouched by war to the end.
In France, by contrast, as a result of the fighting and the occupation, more than half a million private dwellings and 17,600 public buildings were reckoned completely or largely destroyed; 860,400 acres of farmland were laid waste or rendered unsuitable for cultivation; and 20,000 factories and workshops were destroyed or seriously damaged. Some factories, especially those containing modern machinery, were dismantled and shipped to Germany. At least a million head of cattle were also transferred east of the Rhine.
Most appallingly, when the Germans ‘rationalised’ their front and fell back to the supposedly impregnable ‘Hindenburg Line’ early in 1917, at some points retreating up to fifty kilometres, they carried out a ruthless, systematic policy of destruction. Demolition teams obliterated all industrial plant, farms and infrastructure before abandoning the territory the Imperial Army had occupied for just over two and a half years. Coal pits were dynamited and flooded. The local civilian population of around 125,000 was forcibly evacuated. The area was sown with mines and public buildings booby-trapped.
It is not so surprising that estimates of the total monetary cost to France of the fighting and occupation ran to between 35 billion pre-war gold francs ($7 billion) and 55 billion gold francs ($11 billion).11
In Belgium the country’s population and its industries suffered even worse abuse. Factories were subjected to massive requisitions or, if seen as post-war competition for German industries, closed or allowed to decay. Many were totally demolished. Machinery was commandeered and sent to Germany. The country lost 6 per cent of its housing stock and two-thirds of its railway tracks. One hundred and twenty thousand Belgian workers, many robbed of their
employment by factory and mine closures, were deported to Germany and used as forced labour.12
All this happened with the approval not just of the Kaiser and his commanders, but of many German politicians and industrialists. As early as September 1914, Chancellor Theobald von Bethmann-Hollweg had circulated a discussion paper written by an aide that envisaged outright annexation of extensive areas of Belgium and north-eastern France, turning the remains of Belgium into a vassal state and effectively crushing France as a military and economic threat to Germany once and for all. It was effectively a ‘shopping list’ of maximum demands rather than a formal policy document, but nevertheless showed the extent of ambition within German elite circles.
It is hard to see the paper as anything other than a blueprint for a German Europe:
The general aim of the war is security for the German Reich in west and east for all imaginable time. For this purpose France must be so weakened as to make her revival as a great power impossible for all time. Russia must be thrust back as far as possible from Germany’s eastern frontier and her domination over the non-Russian vassal peoples broken.
France.
The military to decide whether we should demand ceding of Belfort and western slopes of the Vosges, razing of fortresses and ceding of coastal strip from Dunkirk to Boulogne.
The ore-field of Briey, which is necessary for the supply of ore for our industry, to be ceded in any case. Further, a war indemnity, to be paid in instalments; it must be high enough to prevent France from spending any considerable sums on armaments in the next 15-20 years.
Furthermore: a commercial treaty which makes France economically dependent on Germany, secures the French market for our exports and makes it possible to exclude British commerce from France. This treaty must secure for us financial and industrial freedom of movement in France in such fashion that German enterprises can no longer receive different treatment from French.
Belgium.
Liège and Verviers to be attached to Prussia, a frontier strip of the province of Luxemburg to Luxemburg.
Question whether Antwerp, with a corridor to Liège, should also be annexed remains open.
At any rate Belgium, even if allowed to continue to exist as a state, must be reduced to a vassal state, must allow us to occupy any militarily important ports, must place her coast at our disposal in military respects, must become economically a German province. Given such a solution, which offers the advantages of annexation without its inescapable domestic political disadvantages, French Flanders with Dunkirk, Calais and Boulogne, where most of the population is Flemish, can without danger be attached to this unaltered Belgium. The competent quarters will have to judge the military value of this position against England.
Luxemburg.
Will become a German federal state and will receive a strip of the present Belgian province of Luxemburg and perhaps the corner of Longwy.
We must create a central European economic association through common customs treaties, to include France, Belgium, Holland, Denmark, Austria-Hungary, Poland, and perhaps Italy, Sweden and Norway. This association will not have any common constitutional supreme authority and all its members will be normally equal, but in practice will be under German leadership and must stabilise Germany’s economic dominance over Mitteleuropa.
The question of colonial acquisitions, where the first aim is the creation of a continuous Central African colonial empire, will be considered later, as will that of the aims to be realised vis-à-vis Russia.
A short provisional formula suitable for a possible preliminary peace to be found for a basis for the economic agreements to be concluded with France and Belgium.
Holland.
It will have to be considered by what means and methods Holland can be brought into closer relationship with the German Empire.
In view of the Dutch character, this closer relationship must leave them free of any feeling of compulsion, must alter nothing in the Dutch way of life, and must also subject them to no new military obligations. Holland, then, must be left independent in externals, but be made internally dependent on us. Possibly one might consider an offensive and defensive alliance, to cover the colonies; in any case a close customs association, perhaps the cession of Antwerp to Holland in return for the right to keep a German garrison in the fortress of Antwerp and at the mouth of the Scheldt.13
Even as a summary of daydreams experienced during a time of euphoria – the Germany army was still advancing on the Marne, with Paris in its sights – the memorandum is a drastic piece of work. It cannot be asserted that this amounted to a firm policy – historians have been arguing about this issue since the document was discovered in the 1950s in an East German archive – but it seems unquestionable that according to these lights, if she won, Germany planned to exercise dominance in Europe. Ruthlessly so.
Admittedly, on the other side, agreements were also being made as the war went on which, to modern sensibilities, appear monstrously unjust and high-handed. There was the secret treaty between the Entente powers awarding Imperial Russia control over the Dardanelles and Constantinople (now Istanbul) after victory. Another set of secret agreements, under which Italy entered the war on the Entente side, promised Rome substantial chunks of Austria and the Aegean islands as well as German colonies. Finally, there was the breathtaking hypocrisy of the so-called Sykes–Picot Agreement, which, even as the Entente encouraged Arabs to raise the standard of rebellion against their Turkish overlords, proposed to divide up the Arabic-speaking Middle East (Syria, Lebanon, Palestine, Iraq) between Britain and France. Though concealed beneath slogans of peaceful development and democracy, this amounted to a new, even more toxic final bout of opportunistic imperialist expansion, one for which our world is still paying a heavy price.
Bethmann-Hollweg’s ‘September Programme’ was a radical proposal, but by no means the most extreme of the plans being floated around quite respectable mainstream political circles in the Reich during the course of the war. These also included large-scale annexations in western Russia and the Baltic lands as well as even more sweeping losses for France and Belgium.14 The peculiarity of the discussion within Germany, however, rested in the participants’ blatant assumption of the absolute and permanent dominance in Europe that would follow victory. Everyone from government figures, industrialists and extreme nationalists – sometimes all three functions were combined within individual human beings – discussed such plans for boundless supremacy of German political, military and economic interests as if they were natural and right.
The purpose of detailing all this is not to apportion blame – though that would all too soon become a game everyone would play and which continues in historical circles to this day – but, rather, to show that all the countries involved in the war knew that they couldn’t afford to pay for their folly. The losers would have to do that.
On the German side, the chief way of ensuring that the country recovered quickly after the hoped-for victory was to put the Reich in a situation of such crushing superiority that it could do, and take, what it wanted. And then came the question of compensation. As Helfferich had put it in his famous speech on the 1915 budget, it was ‘the instigators of this war who would have to bear this lead weight of billions’. And he had been right. It just depended who, when the savage music of mass slaughter stopped, was going to be found sitting in the chair marked ‘instigator’.
A reparations bill of 5 million gold francs – amounting at the time to 25 per cent of the defeated country’s annual gross domestic product – had been imposed by Bismarck on the French in 1871. This huge windfall to the Reich’s economy was said to have helped fuel the near-disastrous boom that followed German unification. The 1871 imposition was not to make restitution for damage to Germany. No fighting had taken place on German soil. Again, in the First World War, any reparations demanded by Germany would not have been for devastation of the Reich’s territory, resources or infrastructure, for (apart from a few early and fairly ineffec
tual aerial bombing raids and some fighting in German Alsace-Lorraine) there had been none. So what would Germany have demanded? Enough to compensate her for the quite enormous cost of the war?
Some indication of how a victorious Germany might have treated the Entente in the war’s aftermath came with the Treaty of Brest-Litovsk, signed early in 1918.
Imperial Russia’s huge but mediocre and often poorly led army had been slowly pushed back out of Poland and most of the Baltic lands and into what is now Ukraine and Belarus. There had been some temporary Russian successes. The so-called Brusilov Offensive in the summer of 1916, named after the general who planned and launched it, had at great cost forced the Austro-Hungarian forces to abandon their early gains. Nevertheless, the story of Russia’s participation in the war became one of ineffectuality at the front and increasing political and social chaos at home.
By February 1917, the British Military Attaché to the Russian army, Colonel Knox, sent his superiors in London a message on the situation there that augured disaster. More than a million Russian soldiers had been counted killed, and a further 2 million missing or taken prisoner. Another million had deserted. ‘These men,’ Knox wrote, ‘were living quietly in their villages, unmolested by the authorities, their presence concealed by the village communes, who profited by their labour.’15
The Downfall of Money: Germanys Hyperinflation and the Destruction of the Middle Class Page 3