The Wages of Destruction: The Making and Breaking of the Nazi Economy

by Adam Tooze

In strictly economic terms, the defining agenda of German nationalism from the Dawes Plan of 1924 onwards was not work creation but the repudiation of Germany’s international obligations, first reparations and then the international credits taken up since the early 1920s to pay them. Until 1932, as we have seen, logic dictated the need to stick to the United States. The Young Plan did at least offer a reduced annuity and only pressure from the United States offered any prospect of a final elimination of reparations. The ultra-nationalists thus remained in a minority and fulfilment remained the bedrock of respectable politics. By the autumn of 1932, however, the situation was quite different. In July 1932 at the reparations conference in Lausanne, Britain and France agreed to a deal that brought a de facto end to Germany’s reparations payments.96 Significantly, they did so, against the will of the Americans, by tying a final end to all German obligations to a cancellation of the war debts owed by them to the United States. Britain made one last payment on its American war debts in December 1932, but only under protest. France, Belgium, Poland, Estonia and Hungary simply defaulted. Prime Minister Édouard Herriot, who had advocated honouring France’s obligations, suffered a crushing defeat in parliament. America was no longer able to hold the ring in Europe. And this in turn had dramatic implications for German strategy.