Chapter 7: Benefits and War (Additional Chapter, Seeking Support)

  "War came and went, but my soldiers remained forever loyal!"

  War is the most direct manifestation of the value of soldiers, whether victory or defeat, those who can face death are heroes. This world can make countless heroes in war, but who can take care of the aftermath of heroes? Who can mourn for the late hero? Who will pay the bill for the war? The brave warriors on the battlefield, or the silent and unknown people behind them.

  The smoke of the European war has long since dissipated into the air, the grief of the dead has long since turned into distant tears that have disappeared without a trace. But wars have occurred and ended, someone must take responsibility for them and bear the pain. It was not the Paris Peace Conference that led to the demise of the German Empire, but rather the newly established Weimar Republic of Germany became the bearer of this sorrow, with the people as its main characters.

  Germany lost nearly one-tenth of its population and one-seventh of its territory in the war, and as a result received astronomical reparations. The total debt owed by European countries to the United States was $13.4 billion, with Britain owing $3.3 billion, France $2.6 billion, and Italy $1.65 billion. The Treaty of Versailles stipulated that Britain and France could obtain war reparations from Germany to repay their debts to the United States, as the victorious countries eagerly awaited payment from the defeated country because they too were deeply in debt.

  "When a person is having bad luck, even drinking cold water will choke him!"

  Bad luck had become a kind of never-missed fortune, the Weimar government, busy and flustered, took the ancient and unchanging old trick of drinking poison to quench thirst, that is, increasing paper currency. The disaster began to befall the Germans from then on, and the high-speed printing machine soon brought Germany an unprecedented malignant inflation in human history.

  In early 1921, one US dollar was equal to 64 marks. By the end of 1923, the exchange rate had deteriorated to 4.2 trillion marks per dollar. The German people's standard of living changed dramatically as businesses were forced to pay wages daily, otherwise the money would be worthless by the next day due to inflation.

  Daily necessities have become extremely scarce commodities, and the market is lacking everything except money. The value of paper money as a physical object has surpassed its face value. In a country that emerged from countless war heroes, it is now because of war preparations that its people have become those who pay the price.

  Due to Germany's financial exhaustion and the contradictions among the victorious powers in competing for German reparations, an insoluble dispute in capitalist international economy and politics, the great powers had to do something.

  The British and French governments proposed linking the issues of reparations and war debts, with a view to simultaneously writing off both the war debt owed by Britain and France to the United States and their claims for reparations from Germany. As Germany's financial and economic situation continued to deteriorate, making it increasingly unable to pay the reparations due to the Allied Powers, the contradictions between Britain, France and other countries over the German reparations issue became more acute. British Foreign Secretary Balfour sent a note to France, Italy and four other Allied Powers, stating that Britain was prepared to abandon all its future rights to reparations from Germany and all its claims for payment of war debts. The implication was that the United States should also make an effort to cancel its demands for war debt repayment.

  After the Belgian army occupied the Ruhr region of Germany, the contradictions between Britain and France on the German issue became more acute, and Germany also stopped compensating Britain, France and other countries. US President Coolidge stated to the press that he opposed linking war debts with reparations for discussion. Later, based on a British proposal, the Allied Reparation Commission set up two special committees in November 1925, one to study methods of balancing the German budget and stabilizing German finance, and the other to investigate the outflow of German capital and design ways to bring it back.

  Two special committees were chaired by American banker Charles G. Dawes. An international committee of experts from five countries, including France, Italy, Belgium, the United Kingdom and the United States, went to Germany to investigate and study the German reparations issue. On April 9, 1926, Dawes drafted a plan to solve the reparations problem, known as the Dawes Plan. The plan came into effect after being discussed and passed at the London Conference.

  The plan attempted to ensure German reparations payments through the restoration of the German economy. The Reichsbank was reorganized under Allied supervision, currency reform was carried out and an 800 million gold mark loan, equivalent to $190 million, was provided by the Allies to stabilize its currency.

  In the absence of a final determination of the total amount of reparations, Germany's annual quota for reparations was set at 10 billion gold marks in the first year, increasing annually to 25 billion gold marks by the fifth year; the sources from which Germany would pay its reparations were customs duties, taxes on tobacco, alcohol and sugar, railway income and industrial and commercial taxes.

  Issue 110 billion gold marks in railway bonds and 50 billion gold marks in industrial bonds; Germany's financial, foreign exchange, rail operations, and tax collection affairs are placed under international supervision. Germany withdraws troops from Ruhr as a condition for accepting the reparations plan.

  August 16, 1926, the plan was put into effect after being accepted by both parties. Undoubtedly, the implementation of this plan will play an important role in the recovery and development of Germany's economy in the second half of the 1920s. The plan is one of the crystallizations of Dawes' superb economic and political talents, and also an important step for post-World War I America to move towards independent world policy.

  Previously, the United States had indicated that it would not join the League of Nations but would cooperate with those nations which wished to form a non-political association of states and with foreign governments which wished to see the revival of stricken Europe. The so-called "non-entanglement" and "non-participation," meant only that the influence was to be exerted in an American way. For at that time, the United States did not have the ability to control the League of Nations but had considerable influence, and non-participation in European affairs was obviously impossible.

  As a solution to the German reparations issue, the plan would not only put an end to the chaotic state of Germany's economy and solve a series of technical problems surrounding Germany's continued reparation payments, but also greatly ease the contradictions, struggles and stalemates between the US, France and other countries over the issue of German reparations.

  The Dawes Plan After the implementation of the Dawes Plan, a large amount of foreign capital, mainly from the United States, began to flow into Germany. The problem of lack of domestic funds in Germany was solved, and with the help of a large amount of material equipment and technical assistance from the United States, its economy began to stabilize and recover; France and Britain also gradually received some reparations, alleviating their domestic financial contradictions, and also repaid loans to the United States. After the European economy as a whole stabilized, the entire world gradually began to recover and slowly move towards prosperity.

  However, the real significance behind a plan is not as simple as the plan itself.

  After Europe experienced an unprecedented large-scale war, the original capital concentration and production purposes did not change, and there was no basis for high profit rates. The Dawes Plan instead promoted the monopoly and concentration of capital, and the essence of the plan was to make Germany a colony for the United States and Britain to obtain profits.

  Batch after batch of US dollars flowed from the United States into Germany, then flowed into the Allied Powers in the form of reparations, and finally flowed back to the United States in the form of war debts, forming a cycle. The implementation of the Dawes Plan showed that the United States played a crucial role and had actual capabilities in European affairs. At the same time, it also demonstrated the uniqueness and desire of US participation in European affairs. Of course, it is undeniable that the Dawes Plan will inevitably provide economic support to Germany. It will play a positive role in the recovery and development of post-war German economy and even world economy.

  Zhang Yusheng rarely inspected the progress of the Taishan plan, and Zhang Yu thought he would be very happy to walk around and take a look under his introduction. However, Zhang Yusheng came in and pulled him into the office to discuss important matters, especially some major events that occurred internationally. Zhang Yu had been staying in the Jiuwanda Mountain area, which was isolated from the world, so he didn't understand those external things.

  "What does this plan have to do with us? Germany's economic recovery is stable, contributing to the global economy's resurgence, and our foreign trade export efficiency has also rebounded. Is there any more significant meaning than that?" Zhang Yu's mind has been preoccupied with binary problems lately. "Recently we've already been studying a problem that only 10 people in the world understand, why wouldn't we be interested in looking at it?"

  Zhang Yu's words are humorous and also have special meaning. Zhang Yusheng naturally knows what "there are only 10 people in the world" means. Computers rely to a large extent on binary mathematics, and the number 2 does not exist in binary, represented by the juxtaposition of 1 and 0. Zhang Yu's words are also explaining that they have already started researching computers.

  "Do you know where Hitler is now?"

  "Hitler? At this time, he should be in some prison in Germany counting stars!" Just as Zhang Yu was about to lose interest in the conversation, Zhang Yusheng's words sparked his enthusiasm. "Is this plan still related to him or World War II?"

  Chang Yu-sheng smiled wryly, which was his answer to Chang Yu's question. "This year Hitler was sentenced to five years in prison for the failed Munich Beer Hall Putsch. He even managed to drag Field Marshal Ludendorff, a highly respected figure of the German Empire, onto his reviewing stand, and although it ended in failure, we can't help but take notice. The moment he stepped into prison marked the beginning of his struggle."

  "Haven't you done anything? Like bribing the prison guards or something, and getting rid of him? After all, it's not our first time destroying a great man, what's one more? With this kind of demon alive in the world, humanity will only suffer endless pain..."

  "Zhang Yu, don't take anything too lightly. Some things require more thought, considering the reasons behind them, their impact, duration, and significance. Especially for those that will have far-reaching consequences, you must see into the past, gaze into the future, and of course, also consider the present. This is politics!"

  Zhang Yu-sheng said, looking at Zhang Yu's enlightened expression: "Hitler is a very important person. I not only won't kill him, but also have to spend money to hire someone to take good care of him. Although we can't let him feel that someone is specially taking care of him and changing his life, at least we must ensure that he completes his great thoughts and works well in prison. Otherwise, World War II would not break out, and how could our China rise up?"

  Zhang Yusheng motioned for Zhang Yu to sit down. The Taishan plan was a long-term scientific research project, and it wasn't like there was a deadline that they had to rush to meet. "Let's not talk about how Hitler changed the world and brought about war," he said. "You and I are both people of the second generation, we all know the facts about World War II, but the reason why two big wars broke out in such a short period of time, causing fathers to die on the battlefield only for their sons to go to battle soon after... it's very simple." Zhang Yusheng began to explain the reasons behind this to Zhang Yu, and of course, only Zhang Yu could understand those analyses.

  World War I opened a new and most terrible page in the history of human warfare, with advances in war technology brought about by industrial civilization resulting in casualties numbering in the tens of millions and expenditures running into the hundreds of billions. The brutality and losses of the war were unprecedented, posing a severe challenge to resolving the issue of war reparations.

  "We both know that after the war, Germany's primary condition for rising again is to solve the problem of war reparations and gain the initiative in war reparations. The Allied Powers' demands on Germany's post-war war reparations are roughly based on two goals."

  "By exacting war reparations from Germany to punish her, or by demanding indemnities to weaken Germany's economic power and strengthen the economic might of the Allied countries. The Allied Powers pinned their hopes on German reparations for settling their war debts, and even planned to rely on these reparations to restore their own economies. As the saying goes, 'the higher the hope, the greater the disappointment.' The more they hoped that Germany would pay heavily, the more they wanted to make Germany their slave. But can such fantasies ever come true?"

  "For Germany, to take the initiative in war reparations, the key is to succeed in diplomacy, and this hope of success lies only in using the inconsistent interests of various victorious countries to conduct a distant attack strategy. In fact, they did quite well, knowing that each member of the Allied Powers had their own concerns, and there was no unified opinion that could be easily exploited."

  "Moreover, Germany's current peripheral political environment is quite good. The powerful neighbor to the east, the Austro-Hungarian Empire, has disintegrated into many independent small countries. Austria and the dissolved Turkey are not threats. In the northeast, Russia has undergone national upheaval and feudal restoration, with repeated turmoil and Nicholas II's crazy purge causing Russia's national strength to decline to a terrifying extent. Moreover, Poland, which has become independent, is still a good buffer zone between Germany and Russia. To the west, France no longer regards Germany as a threat, but instead has deep contradictions with Britain. However, most importantly, the United States, as a major power that emerged after the war, has a significant say in European affairs. As long as you hold onto Uncle Sam's thigh, everything will be fine!"

  France had a bitter experience of paying war reparations to Germany, and the losses in the war were also severe. It naturally wanted to weaken Germany through reparations to avenge the Franco-Prussian War and prevent it from becoming a threat again. The UK, based on its practical interests, believed that if France became too powerful, it would dominate Europe and threaten itself, so it adopted a policy of supporting Germany and suppressing France.

  The United States, although its expeditionary force also paid a heavy price in the great war in Europe, cannot deny that it has become the creditor of various countries. Its policy towards Germany is more about supporting Germany and making it an important base for itself in Europe, playing the role of a big country in dealing with German issues.

  "So, the different interest demands within the treaty led to continuous changes in the issue of post-war German reparations. The unresolved reparation issue affected European economic stability, and the Weimar Republic's increased currency issuance during this period further exacerbated Germany's economic decline. The urgent situation forced countries to compromise, resulting in the birth and implementation of the Dawes Plan. This is the best evidence of France's diplomatic failure and Germany's diplomatic success, which is not only a contest between national diplomatic strategies, but also has far-reaching significance..."

  "The US's move turned the national debt of the Allied Powers into German-issued bonds, transferring American creditor rights to bondholders. Although this ensured the realization of American creditor rights and countries repaid their foreign debts, an important consequence was that international financial capital began to dominate the world situation. And I'm not exaggerating! Zhang Yu needs Zhang Yu's understanding and support, especially on this issue."

  What is international capital? The "Das Kapital" written by Germans is a branch of classical economics, and Germans have a clear understanding of international capital and are very good at using it to achieve global balance. With the implementation of the Dawes Plan, Germany's national debt became a financial capital that can be subscribed to by the whole world, especially with a large amount of private capital from the United States pouring into the bond market, which in turn made Germany transform its debt from a national one to a capitalist world as a whole, and the interests of bondholders need to be guaranteed by the entire capitalist world.

  "For national debts, after the war, countries were unable to repay, and no one was able to wage war again. The creditors of the United States and other countries, for their own private interests, turned these debts into bonds held by the entire capitalist world. Why? Because at present, gold is around $24 per ounce, and the US capital market absolutely does not have the strength to complete the purchase of tens of billions of dollars in bonds on its own. To accomplish this, it must be a global financing process."

  "This is obviously a huge victory for Germany itself. The interests in between have completed the transformation from sovereign states to international financial capital. Perhaps Zhang Yu, you are not yet clear about the power of this, and the current events are also following this historical fact. If nothing unexpected happens, future developments will certainly be as I said below."

  Zhang Yusheng said to this, from Zhang Yu's office desk to find paper and pen, he needs to give some records in certain key places, so that Zhang Yu can see the development of the rules, how many World War I left behind the evil spirits are haunting, of course, such analysis can only be done by these two people, others will probably treat them as mentally ill, but their analysis is indeed very important.

  "Try to imagine for a moment that Germany one day declares its finances on the brink of bankruptcy and unable to carry out this plan. Who would be most threatened? And who would ultimately benefit? Clearly, those most threatened would be the capital that has purchased German bonds, which determine the distribution of interests around the world, so Germany's reparations would have to be reduced in order to safeguard these bonds, the cost of Germany not carrying out this plan is really unbearable for the capitalist world."

  "So, the capitalist world will have to renegotiate and coordinate on the issue of reparations again, formulate a new plan to replace the Dawes Plan, with the aim of ending foreign control over Germany's economic life. The reason why it is possible to easily greatly reduce the amount of reparations is still the power of international financial capital, because the repayment of international financial capital needs to be guaranteed first, and international capital would rather get a little less than not getting repaid by Germany."

  "However, no one could have foreseen that the cumulative effect of the long-standing drawbacks of the Western economic system would start to go crazy, and the mad pursuit of profit under capitalism would bring about an unprecedented disaster. After the financial crisis, the world entered a period of great depression, which greatly affected Germany's ability to pay reparations. Once Hitler came to power, he would refuse to fulfill the Treaty of Versailles, especially the war reparations. This open defiance of the victorious countries was also supported by international finance capital."

  "International capital has determined the economic lifeline of various countries, and this is also the beginning of the appeasement policy of various countries under the situation of maintaining the interests of international capital. Because all countries dare not offend Germany and the German bondholders in their own country will be affected when Germany presses for debt repayment, the original German national debt has become a special 'deposit' in the hands of its own people. Who dares to press for debt repayment?"

  "Politics serves the economy, and for Germany's strength they can only adopt an appeasement policy. Successfully transforming the country's debt into a debt to international financial capital, unifying Germany's development with the interests of global financial capital, while using the influence of this financial capital in each country to dominate each country's appeasement towards Germany, giving Hitler room for expansion. This is one major reason why we must take him seriously, and it's not just this outcome."

  Germany's creditors, through the US capital market, allowed global financial capital to subscribe to these bonds. As a result, Germany was able to bind global financial capital with these bonds. The non-specific nature of bondholders made it difficult for Western victorious countries' diplomatic and military powers to openly intervene in identifying the parties involved. However, each country had to protect the interests of its own bondholders. Policies related to these bonds were complicated by the fact that they were issued on the US capital market, with the US acting as an intermediary. To suppress the chain reaction of economic consequences triggered by the Dawes Plan and withdraw economic investments in Germany without suffering too much loss... various problems arose, one more complex than the other. The economic straitjacket made countries feel helpless and retreat, gradually losing control over Germany. This marked the beginning of the rise of the Third Empire.