WIESBADEN AGREEMENT

WIESBADEN AGREEMENT; an accord finalized on 7 October 1921 between Germany and France whereby Germany agreed to pay reparations* in kind for the reconstruction of France. While the Wiesbaden concept responded to problems inherent in the London Ultimatum (see Reparations), it originated with Konstantin Fehrenbach's* government and thus preceded disclosure of the ultimatum. Negotiated at Wiesbaden on 12–14 June, the accord was the work of Walther Rathenau,* the new Reconstruction Minister, and Louis Loucheur, France's Minister of Liberated Territories. On 2 June Rathenau renewed Fehrenbach's April proposal that Germany supply equipment and workers for French reconstruction. Not only did the French respond promptly and positively, they urged formation of a private corporation for a program of deliveries and in-kind payments. Hardly more than a tentative and partial solution to reparations, Wiesbaden was reviled in Germany, but it was important for several reasons. First, it was an effort, albeit negligible, to make reparations an economic rather than a political issue. Second, it revealed a willingness in France and Germany to negotiate bilaterally without recourse to the Reparation Commission. Third, while it reinforced the absurdity of the London Payment Schedule, it underscored Germany's honest effort to meet its obligations. Above all, Wiesbaden was a subtle piece of Chancellor Joseph Wirth's* scheme of achieving revision of the Versailles Treaty* through a policy of fulfillment.* As a psychological ploy, it had some success; provisional relief on reparations was forthcoming. But as a practical arrangement, it failed. The final accord, scheduled to expire in May 1926, called for the transfer of a broad range of products—the equivalent of seven billion gold marks over four and one half years—with Germany receiving up to 35 percent in reparation credit for any one year, to be repaid after 1926. But French businessmen feared a flood of reparations deliveries, German businessmen were loath to give up potential exports just as inflation* was heating up, and the Reparation Commission pleaded incompetence to rule on the accord. When Rathenau resigned in October 1921, it was largely due to Wiesbaden. Carl Bergmann,* the German reparations expert, christened the agreement an unworkable piece of ‘‘political window dressing.''