100 years ago the German Reich found itself in a desperate situation.

Inflation, which had plagued the country since World War I, was spiraling out of control.

According to many experts, the beginning of currency devaluation was the sharp devaluation of the mark against the dollar, which was mainly attributed to the burden of the reparations levied by the Allies after the war.

At the same time, however, the monetary and financial policy pursued in Germany was also the subject of criticism.

Gerald Braunberger

Editor.

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The government headed by the then Chancellor Joseph Wirth took the view that Germany would only be able to free itself from the stranglehold of high reparation payments and accelerating currency devaluation if reparations could be reduced through negotiations.

The suspicion circulated abroad that the German government, with the consent of big industry, was deliberately ensuring a high rate of inflation in order to force a reduction in reparations.

In this situation, the Reich government invited foreign experts to ask for their opinions on the problem.

One of the reviewers was John Maynard Keynes.

Friendliness towards the former enemy

The British economist caused a sensation after the First World War because, as a representative of the London Ministry of Finance, he left the Versailles Conference in protest and harshly criticized the peace treaty in a book "The Economic Consequences of the Peace".

Keynes believed that Germany, which as a result of the peace treaty had to cede more than ten percent of its area and economic power as well as important sources of raw materials, could pay reparations of at most 40 billion marks (based on the value of the mark before the outbreak of war).

That corresponded roughly to the gross domestic product of one year.

In the end, the reparation claim amounted to 132 billion marks, payable over a period of two generations.

Keynes not only concluded that Germany was economically overwhelmed by this.

Above all, he feared an era of protectionism and weakness in Europe if Germany did not find its feet again.

Keynes' book caused controversy in Britain and the United States, anger in France and much sympathy in Germany.

Keynes was accused of excessive friendliness towards the former enemy.

At Versailles, Keynes had made friends with the Hamburg banker Carl Melchior, who had been part of the German delegation.

But apart from this personal connection, Keynes was not particularly close to Germany;

he could read German texts more badly than well;

He couldn't speak German at all.

However, his criticism of the Treaty of Versailles repeatedly brought him invitations to Germany.

In 1922, for example, he had given a speech in Hamburg on the subject of reparations (in English), to which the audience had responded with cheers.

"If Germany still has a lot to go through, I see no reason to despair," said the Brit.

Keynes also had good contacts with the political elite in Berlin.