Experience suggests that the smaller the reparations levy, the more likely it is to be paid, and conversely that large levies are unlikely to be collected. The term was also applied to the obligations of Israel to the Arab refugees who suffered property losses after Israel’s victory over the Arab states in 1948. Announcing our NEW encyclopedia for Kids! Against these advantages must be set the complex economic problems created by the transfers. "Man is born free, and everywhere he is in chains." - LORD BYRON, Childe Harold's Pilgrimage "The man who has no imagination has no wings." Ironically, the reparations program was most successful during the period of greatest borrowing, between 1924 and 1931, when Germany paid 11.1 billion marks and borrowed 18 billion marks, a net transfer of 6.9 billion marks to Germany. This being so, reparations are apt to produce quite the opposite of their intended effect. - Thomas Paine "Liberty exists in proportion to wholesome restraint." The difficulties encountered in a scheme of capital reparations are present here also but on a lesser scale. Later the meaning of the term became more inclusive. The price of liberty is eternal vigilence. The plan was initiated by a loan of 800 million marks to Germany. It soon was recognized that the initial claims of $320 billion could not be satisfied, and the Allies announced their satisfaction with reparations which would “compensate in some measure for the loss and suffering caused by Germany.”. I claim for Canada this, that in future Canada shall be at liberty to act or not act, to interfere or not interfere, to do just as she pleases, and that she shall reserve to herself the right to judge whether or not there is cause for her to act. - ROSA LUXEMBURG, The Russian Revolution, "None can love freedom heartily, but good men; the rest love not freedom, but license." - IMAMU AMIRI BARAKA, in Kulchur Since the magnitude of reparations cannot be determined by war costs, it must be determined by the defeated country’s ability to pay, which is much less than its stated liability. A slight error in removing too much of one kind of equipment can produce a great loss in another industry, which in consequence must operate at undercapacity. In 1953 the U.S.S.R. stopped collecting reparations from the German Democratic Republic (East Germany) and stated that it would return capital goods worth 3 billion eastern deutsche marks. It can pay in cash or in kind a portion of the goods and services it is currently producing—that is, a part of its national income. This sum was more than 10 times the prewar national income of Germany (at constant prices) and an even greater multiple of income after the war. A more fundamental circumstance was the unwillingness of the creditors to accept reparation payments in the only practicable way they could be made—by the transfer of goods and services. "None can love freedom heartily, but good men; the rest love not freedom, but license." As a general rule, men must be either pampered or crushed. The nature and importance of the effects depend on the size of reparations in relation to the national income of the debtor and creditor countries, on the sensitivity of their price levels to expenditures and receipts from imports and exports, on the flexibility of their foreign exchange rates, and on the money supply together with the rate at which it is spent. Following World War I, some of the Allied powers were able to conceive of no limit to a justifiable tribute from Germany. The continued deficit caused the U.S. to suspend all reparations deliveries in May 1949. This was resolved by reducing reparations to a token amount, and by 1950 payments stopped. Reparations cannot be paid out of revenue raised internally; the revenue must be converted into income or capital for transfer to the victor or into the currency of that country. The successful execution of this plan called for an export surplus in the paying country and conversion of the surplus into the currency of the receiving country. Did the Normans conquer England in 1066? "Freedom is the freedom to say that two plus two make four. The result was the disastrous inflation of 1923 when the mark became almost worthless. – W. E. B. It may send numbers of its workers to the victors to restore areas damaged by the war and repatriate them when the work is completed. - JEAN-PAUL SARTRE, Existentialism and Humanism, "You can muffle the drum, and you can loosen the strings of the lyre, but who shall command the skylark not to sing?" - JOHN STUART MILL, On Liberty The payment of reparations in kind or cash out of income or capital constitutes an export surplus; that is, the paying country sends out more goods and services than it imports. Finland’s reparations payments were the most remarkable. Show me the country that has no strikes and I’ll show you the country in which there is no liberty. Of course it’s why you want to become a writer – because you have the liberty to do that, but once you have the liberty you also have the obligation to do it. In 1952 the Federal Republic of Germany (West Germany) accepted responsibility for the external debts of Germany (except those of the Eastern zone), including the Dawes and Young plan loans which stabilized Germany in the 1920s in order to facilitate reparation payments. - Epicetus, Discourses, "We are willing enough to praise freedom when she is safely tucked away in the past and cannot be a nuisance. This article was most recently revised and updated by, Obstacles to settlement and Germany’s actual payment, https://www.britannica.com/topic/reparations, How Stuff Works - History - War Reparations, reparations - Children's Encyclopedia (Ages 8-11). - Orwell, George [pseudonym of Eric Blair] (1903-1950) from '1984' Following World War I, there was some payment of reparations in kind out of income. The UN recommended that Israel accept the liability and make reparation. Against this should be set relief payments by the Western countries of a larger but unknown amount. - E. M. Forster, Two Cheers for Democracy, "Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety." Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree.... French soldier in Essen, Germany, during the Ruhr occupation (1923–25). This was significant after World War II, when the German and Japanese economies were closely regulated and when there was regulation in every important victorious country except the United States. But, first it's going to piss you off." It is difficult if not impossible to distinguish between industrial equipment of military value and that which can be used only to produce peacetime goods. "The cost of liberty is less than the price of repression." By signing up for this email, you are agreeing to news, offers, and information from Encyclopaedia Britannica. O liberty! Indeed, some of the victors eventually had to make payments to the defeated countries in the interest of restoring economic and political stability. From 1924 to 1931 Germany paid 11.1 billion marks, making total payments about 36.1 billion marks. - HUBERT H. HUMPHREY, speech (1965) "It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly." What crimes are committed in thy name!" "Liberty is to the collective body, what health is to every individual body. - Cicero - Orwell, George [pseudonym of Eric Blair] (1903-1950) from '1984', "It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly." Forbid it, Almighty God! Sign in the British-occupied zone of Germany as the road to Berlin enters the Soviet-occupied zone. "The most stringent protection of free speech would not protect a man in falsely shouting fire in a theater and causing a panic." The purpose was to dismantle German industry so that Germany never again could engage in war. Omissions? Was The American Civil War fought between East and West? After World War I the immigration of German workers into France to restore the devastated areas caused French workers to protest that their wages were being reduced by the increased labour supply. Freedom It was applied to the payments undertaken by the Federal Republic of Germany to the State of Israel for crimes against the Jews in territory controlled by the Third Reich and to individuals in Germany and outside it to indemnify them for their persecution.

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