German-British payment agreement from 1934

The German-British payment agreement of 1934 was a treaty between Nazi Germany and Great Britain to finance mutual foreign trade . The agreement of August 10, 1934 was replaced by the clearing agreement of November 1, 1934, which had the same function.

background

As a result of the global economic crisis , world trade had shrunk sharply. The devaluation of the pound after the abandonment of the gold standard on November 17, 1931 and the protectionist policies of the British and other European countries had changed the terms of trade significantly and pushed up the German Reich's foreign trade deficit . The capital account of the German Reich was also burdened by the payments under the Young Plan .

Germany did not respond with a devaluation race (which would have made it even more difficult to operate the Young Plan), but with Brüning's deflationary policy and foreign exchange restrictions .

With the seizure of power by the Nazis, although deflation policy and the operation of the Young's bonds has been completed, however, the chronic shortage of foreign exchange persisted. With the standstill agreements with many countries, payments due on short-term loans were deferred. With regard to the trade balance, attempts were made to strengthen Germany's self-sufficiency in accordance with the ideology of the National Socialists . In addition (as in many other countries during this time), foreign exchange management was intensified. Finally, the principle of “Buy from your customer” was implemented: imports should come from the countries to which the exports were made. This created an incentive for the third countries to reduce protectionism and there was the possibility of payment via clearing , i.e. the settlement of mutual claims and the payment of only the difference in foreign currency . This bilateralization of foreign trade was implemented through clearing and payment agreements.

In 1935 there were 26 clearing agreements ( Argentina , Bulgaria , Chile , Colombia , Denmark , Estonia , Finland , Greece , Iran , Italy , Yugoslavia , Latvia , Lithuania , Netherlands , Norway , Austria , Poland , Portugal , Romania , Sweden , Spain , Switzerland , Czechoslovakia , Turkey , Hungary and Uruguay ). There was also a special kind of clearing agreement with the USSR .

Payment agreements existed with 6 states. These were Belgium - Luxembourg , England , France , Canada , New Zealand and the Union of South Africa . Payment agreements of a special kind existed with four states, namely the Irish Free State , Japan , Manchuko and Syria - Lebanon .

The agreement

The German-British payment agreement stipulated the following procedure: British importers paid into an account of the British central bank in British pounds. There were no foreign exchange regulations on the British side. These were converted into special marks for the settlement between the British central bank and the German Reichsbank . The Reichsbank made at least 55% of this amount available to German importers a month to purchase British goods. This 55% corresponded to the German foreign trade surplus of the last two years. If this quota were not sufficient to meet German demand, the German authorities were allowed to regulate which goods were allowed to be imported and which were not. However, imports of British textiles could not be restricted. The amount of coal that Germany imported was also not allowed to fall below the volume agreed in the 1933 treaty. If the German imports were higher than the 55%, these amounts had to be paid in foreign currency. The payments for the Dawes loan should also be made from the surplus (since the Reich had stopped the interest service for this in 1933, this point was meaningless in practice). 10% of the German payments were used to pay off the trade debts that had accrued in the past (and which were not paid due to the German foreign exchange management). The remaining credit at the end was available to the Reichsbank in foreign currency.

The agreement only affected goods and services from the countries of origin Germany and Great Britain. Due to the world power of the British Empire , goods from all over the world were traded on a large scale via Great Britain. These “transit trades” were excluded from the agreement.

The agreement was rather unfavorable for Germany compared to the other payment agreements. Germany did not receive any additional credit but, on the contrary, had to reduce existing liabilities. While from the point of view of the British trading participants, the payment processing did not differ from that in free markets, in Germany there was an extensive bureaucracy involved in the processing of foreign payment transactions. For Great Britain, the focus was on securing export opportunities, particularly for the coal industry. This goal has been fully achieved.

The agreement was signed in Berlin on November 1, 1934 , after negotiations began in mid-September. After the annexation of Austria it was extended on July 1, 1938.

Effects

Through the agreement, the accumulated trade debts (the clearing balance) of 55 million Reichsmarks at the end of 1934 were repaid to zero within two years. German-British trade stabilized at a low level. The share of German-British trade in total German foreign trade fell significantly as a result, as it was more attractive for the Reich from a foreign exchange control point of view to trade with other states with more favorable trade agreements.

Export earnings in free foreign exchange as of 1938 by individual countries (top 10)
Japan			14.5%
England			14%
India			11.7%
United States			10.5%
China			10.3%
Otherwise. Asia			6.7%
Egypt			4.5%
Otherwise. America			4.5%
Holland			3.3%
Belgium			3.3%

German-British trade 1929-1938

year	Imports	Exports	balance
1929	865	1306	+ 441
1930	639	1219	+ 580
1931	453	1134	+ 681
1932	258	446	+ 188
1933	238	406	+ 168
1934	206	383	+ 177
1935	256	375	+ 119
1936	264	406	+ 142
1937	309	432	+ 123
1938	283	351	+68

Share of German-British trade in German foreign trade:

year	Imports	Exports
1929	6.4%	9.7%
1930	6.1%	10.1%
1931	6.7%	11.8%
1932	5.5%	7.8%
1933	5.7%	8.3%
1934	4.6%	9.2%
1935	6.2%	8.8%
1936	6.2%	8.5%
1937	5.7%	7.3%
1938	5.2%	6.7%

British-German trade accounted for about 4 to 5% of British foreign trade.

rating

For the historian Oswald Hauser , Germany “finally succeeded in severing England from the front of international believers”. In addition, the agreement was significant against the boycott movement against German trade organized by organizations like the Non-Sectarian Anti-Nazi League . He describes the 45% free foreign exchange that Germany received as a "dangerous concession" with regard to armament. Likewise was Heinrich Brüning of the opinion that Germany through this payment agreement the necessary foreign exchange to rearmament received. He wrote to Times correspondent Norman Ebbutt on June 11, 1946:

“The second was the German-British payment agreement in the autumn of 1934. Members of the German delegation, including my former advisor [H. Fritz Berger], warned the British negotiating partners that the agreement would stabilize the Nazi regime [...] I would like to quote an editorial in the Financial News of March 21, 1939: 'It is difficult to imagine a single factor that would make German rearmament so The German-British trade and payments agreement of 1934 was helpful. '"

For the economic director in the Foreign Office, F. Ashton-Gwatkin, the payment agreement was , as he stated in a memorandum at the beginning of 1936, “in the economic field what the naval agreement was in the political one - a sign of moderation, almost friendship.” The German Ambassador in London Herbert von Dirksen described in a report from July 1938 the payment agreement and the German-British naval agreement as the “two cornerstones” “which, even in critical times, have supported the fluctuating structure of foreign relations” between the two countries.

literature

• Andreas Fülbier: The contract and commercial law of the counter purchase in international commercial transactions . 1992, ISBN 3-11-013628-7 , pp. 4-6.
• Frank C. Child: The theory and practice of exchange control in Germany . 1958, pp. 176-181.
• Richard Fiez: The changes in the world economic structure and the problem of international capital investments . Berlin 1946, p. 85 f.

Web links

• Text of the contract in English and German

Individual evidence

1. ↑ Klaus Schwabe , Francesca Schinzinger : Germany and the West in the 19th and 20th Centuries: Germany and Western Europe; Volume 2 of Germany and the West in the 19th and 20th Centuries . ISSN  0939-5385 , 1994, ISBN 978-3-515-06640-2 , pp. 32-33. on-line
2. ^ Helmuth Wohltat: Foreign exchange management and international payments . P. 24; Article 54 in Volume 3 of Fundamentals, Structure and Economic Order of the National Socialist State, 1938.
3. ^ Opinion of the Reichsbank directorate to the OKW of June 3, 1938. Quoted from: Hans-Erich Volkmann : Foreign trade and armament in Germany 1933 to 1939 . In: Friedrich Forstmeier , Hans-Erich Volkmann (Hrsg.): Economy and armament on the eve of the Second World War . Düsseldorf 1981, p. 131.
4. ^ Oswald Hauser : England and the Third Reich . Stuttgart 1972, Vol. 1, p. 81.
5. ^ Claire Nix (Ed.): Heinrich Brüning Letters and Conversations 1934 - 1945 . Stuttgart 1974, p. 39.
6. ^ Bernd-Jürgen Wendt : Economic Appeasement . Düsseldorf 1971, p. 290.
7. ↑ Wendt, p. 290.