Editing World War I reparations (section)

===London Schedule of Payments===
The London Schedule of Payments of 5 May 1921 established "the full liability of all the Central Powers combined, not just Germany alone," at {{nowrap|132 billion}} gold marks.{{sfn|Marks|1978|p=237}} This sum was a compromise promoted by Belgium{{mdash}}against higher figures demanded by the French and [[Kingdom of Italy|Italians]] and the lower figure the British supported{{mdash}}that "represented an assessment of the lowest amount that public opinion&nbsp;...&nbsp;would tolerate".{{sfn|Marks|1978|p=236}}

This figure was divided into three series of [[Bond (finance)|bonds]]: "A" and "B" Bonds together had a nominal value of {{nowrap|50 billion}} gold marks {{nowrap|({{US$|12.5&nbsp;billion)}}}}{{mdash}}less than the sum Germany had previously offered to pay. "C" Bonds, comprising the remainder of the reparation figure, "were deliberately designed to be [[Chimera (mythology)|chimerical]]",{{sfn|Marks|1978|p=237}} with the Germans being informed that they would not be expected to pay them under realistic conditions.<ref name="Working Papers No. 163/12">{{cite book |last1=Ritschl |first1=Albrecht |title=Reparations, Deficits, and Debt Default: The Great Depression in Germany (Working Papers No. 163/12) |date=2012 |publisher=LSE |page=5 |url=https://eprints.lse.ac.uk/44335/1/WP163.pdf |access-date=2 March 2024}}</ref> They were "a political bargaining chip" that served the domestic policies of France and the United Kingdom.{{sfn|Crafts|Fearon|2013|p=113}} The figure was completely unreal; its primary function was to mislead public opinion "into believing that the 132-billion-mark figure was being maintained". Furthermore, "Allied experts knew that Germany could not pay 132&nbsp;billion marks and that the other Central Powers could pay little. Thus, the A and B Bonds, which were genuine, represented the actual Allied assessment of German capacity to pay."{{sfn|Marks|1978|p=237}} Taking into account the sum already paid between 1919 and 1921, Germany's immediate obligation was 41&nbsp;billion gold marks.{{sfn|Ferguson|1998|p=414}}

To pay towards this sum, Germany could pay in kind or in cash. Commodities paid in kind included coal, timber, chemical dyes, pharmaceuticals, livestock, agricultural machines, construction materials, and factory machinery. The gold value of these would be deducted from what Germany was required to pay. Germany's assistance with the restoration of the university library of [[Leuven|Louvain]], which was destroyed by the Germans on 25 August 1914, was also credited towards the sum, as were some of the territorial changes the treaty imposed upon Germany.{{sfn|Marks|1978|pp=223–234}}{{sfn|Kramer|2008|p=10}} The payment schedule required {{nowrap|{{US$|250 million}}}} within twenty-five days and then {{nowrap|{{US$|500 million}}}} annually, plus 26 per cent of the value of German exports. The German Government was to issue bonds at five per cent interest and set up a [[sinking fund]] of one per cent to support the payment of reparations.{{sfn|Martel|2010|p=156}}

In the London ultimatum of 5 May, Germany was given six days to recognize the Schedule of Payments and to comply with the Treaty of Versailles' demands for disarmament and the extradition of German "war criminals". If it did not, the Allies threatened to occupy the [[Ruhr]].<ref name=":0">{{Cite web |last=Scriba |first=Arnulf |date=14 September 2014 |title=Londoner Ultimatum |url=https://www.dhm.de/lemo/kapitel/weimarer-republik/aussenpolitik/londoner-ultimatum.html |access-date=5 May 2024 |website=Deutsches Historisches Museum |language=de}}</ref> In anticipation of such an ultimatum, the German [[Fehrenbach cabinet|government of Constantin Fehrenbach]], finding itself unable to reach agreement on the issue, had resigned on 4 May.<ref>{{cite web |title=Das Kabinett Fehrenbach – Der Rücktritt des Kabinetts |trans-title=The Fehrenbach Cabinet – The Resignation of the Cabinet |url=https://www.bundesarchiv.de/aktenreichskanzlei/1919-1933/0000/feh/feh1p/kap1_1/para2_10.html#Start |accessdate=5 May 2024 |website=Das Bundesarchiv |language=de}}</ref> The government of the new chancellor, [[First Wirth cabinet|Joseph Wirth]], accepted the ultimatum on 11 May and began the "policy of fulfillment" – by attempting to meet the demands, it tried to show the impossibility of complying with the scheduled payments.<ref name=":0" />