League of Nations Loan (Danzig)

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The League of Nations loans from the Free City of Danzig in 1926 temporarily resolved the city-state's financial problems. It led to a government crisis in Danzig.

Starting position

With the introduction of the Gdańsk guilder it was possible to create a stable currency in Gdańsk. Public finances, on the other hand, remained in a desolate state. At the beginning of 1926 Danzig had 13 million guilders in national debt and was de facto no longer creditworthy. The reason was the economic crisis, the rise in the number of unemployed to 20,000 and the decline in customs revenues.

The Senate of the Free City of Danzig therefore had to make savings in the budget, ask the Reich for support and also seek support for the League of Nations . A number of states had received bonds from the League of Nations , and Danzig also sought such a solution.

The efforts of Senate President Heinrich Sahm in Berlin were successful. The Reich granted a loan package of 10 million Reichsmarks to support Gdańsk industry (including support for the Hansa Bank ) and made a contribution of 3 million Gulden to the civil servants' pension payments.

Negotiations in Geneva

In the summer of 1926, Senator for Finance Ernst Volkmann was sent by the Senate to the League of Nations in Geneva to negotiate a loan from the League of Nations. The League Council then sent two experts to Danzig to examine the finances of the city-state from July 10th to 15th. At the following July meeting of the Finance Committee of the League of Nations, chaired by the Frenchman Dubois, at which for Danzig in addition to Sahm also Vice President Julius Gehl ( SPD ), Volkmann, the Senate advisor for foreign affairs, Ferber and the President of the Bank of Danzig , Meißner part. The finance committee endorsed a League of Nations loan of 30 million guilders on the condition that the city introduce a tobacco monopoly and agree with Poland on a revision of the customs distribution key.

In September 1926 the League Council met in Geneva. The climax was the admission of the German Empire into the League of Nations. On September 20, 1926, the council also dealt with the question of a League of Nations loan for Danzig. Danzig was represented by Senators Sahm, Gehl, Volkmann, Gustav Fuchs ( center ) and Hugo Neumann (liberals).

The Belgian rapporteur Brouckère submitted that he could only recommend a loan for Gdansk once the customs agreement had been concluded, the tobacco monopoly had been introduced and the question of Gdansk's reparation obligations had been resolved. The Council shared this assessment, to the disappointment of the Danzig representatives.

The government crisis

In Danzig, in which there had previously been a bourgeois majority, a minority senate composed of the SPD, the Center and the German Liberal Party (which had formed in 1925 from the "Free Association of Officials, Employees and Workers" and the "German Party for Progress and Economy (since 1920 the name of the Free Economic Association) formed). This government was tolerated by the Poles and the non-attached MP Wilhelm Rahn .

On September 20, 1926, Danzig and Poland signed the customs agreement. It was not ratified by the People's Day until April 27, 1927.

After the Senate presented a reorganization law that met the demands from Geneva, a government crisis broke out. On September 29, 1926, the parliamentary senators resigned. On October 25, 1926, the coalition negotiations were concluded. The Social Democrats went into opposition, the DNVP returned to the Senate.

The new majority passed a third reading on November 26th on a savings law in order to meet the requirements for the loan. There were riots on Volkstag . SPD, Communists, National Socialists and the German Danzig People's Party left the hall in protest.

The core of the austerity measure was the reduction in the number of civil servants by 400 and by a further 200 in the following year as well as salary cuts of up to 13%.

In December 1926 the League Council discussed the Danzig bill again, but determined that the conditions had not yet been met. At the March meeting, the subject was raised for the fourth time and the Council gave its approval.

The bond

The loan amounted to 40 million Danzig guilders. Of this, 15 million was retained for the repayment of the occupation costs in 1920. The rest was used to repay the old debts and to ensure the solvency of the Free City of Danzig. It had escaped national bankruptcy . The use of the funds was to be approved by the League of Nations. A trustee was appointed for this purpose. Several changes have been made to the usage plan over time.

The term of the bond should be 20 years. The payments due were always made until the end of the Free City of Danzig in 1939.

literature

  • Heinrich Sprenger: Heinrich Sahm, local politician and statesman (= scientific contributions to the history and regional studies of East Central Europe. No. 84, ISSN  0510-7008 ). Grote, Köln et al. 1969, pp. 152–159, (At the same time: Münster, University, dissertation of December 9, 1966).
  • Wolfgang Ramonat: The League of Nations and the Free City of Danzig. 1920–1934 (= studies on military history, military science and conflict research. Vol. 18). Biblio Verlag, Osnabrück 1979, ISBN 3-7648-1115-3 , pp. 173-182, (also: Münster, Universität, Dissertation, 1977).