The End of the War 965

Furthermore, Germany was to pay a huge sum—132 billion gold marks, the
estimated cost of the war to the victorious Allies—in war reparations. (There
was a precedent: France had been required to pay an indemnity to the Ger­
man Empire following defeat in the Franco-Prussian war of 1870-1871).
The Weimar Republic would be required to turn over to the Allies much of
its merchant fleet and part of its fishing fleet and railroad stocks, among
other payments. The German Baltic shipyards were to build ships at no cost
to the Allies. Each year, Germany was to give the Allies more than one-fourth
of its extracted coal as further compensation.
But how was the new Weimar Republic to raise the remainder of the repa­
rations? Tax revenues were low because the economy was so weak, and pow­
erful German industrialists opposed any new taxes on capital or business.
The outflow of reparations payments in gold fueled inflation. Government

A German woman using worthless paper money to light her

stove during the runaway inflation of 1923.