German banks, municipalities, and corporations owed money to everybody—$500 million to British banks, several hundred million to French banks, and some $1.5 billion to American lenders. Had it defaulted on reparations at that point, every financial institution with exposure to Germany would have tried to pull what money it could out of the country. Germany would have had to suspend payments on all its commercial loans, creating a domino effect across the globe. Half the London banks would have gone under. Britain, its reserves already depleted, would have been flung off the gold standard. The
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