Thursday, September 30, 2010

Peace At Last! World War I Finally Ends

Some great news out of Europe – the First World War, a conflict so horrible it was known as the “war to end all wars” is finally officially ending 96 years after it began.

And no, you didn't miss 90 years of history, the fighting actually did end in 1918 and the conflict officially came to a halt in 1919 with the signing of the Treaty of Versailles.  But that treaty also stipulated that Germany pay war reparations, primarily to Belgium and France; on Sunday Germany will make the last of those payments with a sum of approximately $93 million, finally satisfying the conditions of the Treaty of Versailles and “officially” ending the war.

As a condition to the treaty, France and Belgium demanded enormous sums of money as reparations from Germany, about 226 billion Reichmarks in 1919.  John Maynard Keynes, Britain's top negotiator at the time, was so outraged at the sum that he walked away from the peace negotiations and warned that Germany wouldn't be able to properly recover from the war themselves if they had to payout so much of their national treasury to France and Belgium, a condition Keynes said would lead to future problems.  Those future problems turned out to be World War II.  The huge debt payments did, as Keynes predicted, bankrupt the German state in the 1920s; which led to the rise of Hitler and the Nazi Party.  The rest, as they say, is history.

The German payment will go towards paying off bonds issued after the end of the conflict against the payments Germany owed to the Allied nations, most of those bonds today are held individuals or organizations like pension funds.  And in case you’re wondering, officially World War II isn’t over either – at least as far as Russia and Japan are concerned, the two sides have never signed a peace treaty due to a dispute over the Kuril Islands, which Russia occupied from Japan in the final days of the war and continue to hold to this day.  North and South Korea have also never signed a peace treaty to formally end the Korean War either.

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