Carl P. Parrini and
James I. Matray
If popular wisdom holds that prostitution is the oldest profession, and spying only a slightly younger occupation, then surely reparations—a country demanding payment or indemnity from another in land, goods, or money for damage inflicted as a result of war—also dates from a very early point in human history. Modern practice on indemnities or reparations has its origins in the late nineteenth century, when statesmen at Hague conferences in the Netherlands began to rewrite the rules for warfare, to limit armaments, to encourage peaceful settlement of international disputes, and, by such indirect means, to fashion a definition of what constituted "a just cause" for war. Indemnities or reparations as a concept developed from the idea that there were clear "laws of war" arising from treaties, conventions, and other international agreements. When in the course of warfare a nation, including all institutions legally subordinate to it, violated these legal norms and brought about "wrongful injury to life, body, health, liberty, property, and rights," that nation must make pecuniary indemnification to the injured persons. It is important to emphasize that in its origins, reparations was conceived of as indemnification for violations of existing international law, rather than for actions contrary to the current "moral" precepts of society.
Germany's Second Reich under Otto von Bismarck established a modern benchmark for indemnities when it collected nearly $1 billion from France in 1871, at the conclusion of the Franco-Prussian War. That same year, the Treaty of Washington provided for arbitration to settle U.S. claims against Britain for the destruction that Confederate privateers built in British shipyards had inflicted on Union merchant ships during the American Civil War. The United States at first requested not only indemnification for direct damages but also $8 million in "war prolongation claims" for all Union costs after the Battle of Gettysburg in 1863. The settlement provided for British payment of $15.5 million in Alabama claims, while the United States would pay $1.9 million for illegal wartime acts against Britain, such as property seizures and imprisonments. In 1885, France wanted an indemnity from the Qing dynasty to end its war against China, but later dropped the demand. Japan was not so lenient after its victory in the Sino-Japanese War of 1894–1895, extracting 200 million taels of silver from China in the peace treaty.
During 1900, the Boxer Uprising resulted in Chinese rebels killing the German minister and trapping the diplomatic legations of Japan and other Western nations, including the United States; foreign business people; and thousands of their Chinese servants and Christian converts in prolonged sieges at Tianjin and Beijing. After a multinational military force liberated the captives, China signed the Boxer Protocol, which required payment of an indemnity of $333 million to eleven nations. The American share was $25 million, but in 1908 Washington remitted all but $7 million to cover private damages. The U.S. government used the remainder to fund a program that sent Chinese students to schools in the United States. Meanwhile, Japan had won the Russo-Japanese War of 1904–1905 and wanted Russia to pay an indemnity. However, bowing to pressure from President Theodore Roosevelt, Japan dropped its monetary demand and accepted the southern half of Sakhalin Island. In 1907, when another conference convened at The Hague, the statesmen had not contemplated a long war that would result in the partial crippling of the economic life of nations. They had envisaged wars of short duration, in which the civilian economies of the belligerents would hardly be touched. But World War I would cause enormous destruction, shaking the foundations on which the "legal" conception of reparations was based.
Bower, Tom. The Paperclip Conspiracy: The Hunt for the Nazi Scientists. Boston, 1987. Discusses Operation Paperclip, which brought German scientists to the United States, despite the involvement of many in Nazi war crimes.
DeConde, Alexander. A History of American Foreign Policy. 3d ed. New York, 1978. Provides succinct summaries of the terms of U.S. agreements that involve reparations prior to the Versailles Peace Treaty.
Falkus, M. E. "The German Business Cycle in the 1920's." Economic History Review 27 (1975). Argues that net declines in foreign investment in Germany in 1928 and 1929 contributed to the onset of the Great Depression.
Finn, Richard B. Winners in Peace: MacArthur, Yoshida, and Postwar Japan. Berkeley, Calif., 1992. Provides a well-researched and reflective study of the occupation that covers the deliberations of the Far Eastern Commission and reparations.
Gimbel, John. Science, Technology, and Reparations: Exploitation and Plunder in Postwar Germany. Stanford, Calif., 1990. Documents how after World War II the United States supervised a comprehensive and systematic intellectual reparations program to exploit German scientific and technical know-how.
Kent, Bruce. The Spoils of War: The Politics, Economics, and Diplomacy of Reparations, 1918–1932. Oxford and New York, 1989. Contends that the Allies were fully aware from the start that Germany could not pay the large reparations they demanded, but followed this policy as a way to silence calls for increased taxes to reduce government debt or finance expanded social programs.
Keynes, John Maynard. The Economic Consequences of the Peace. New York and London, 1919. Contains an excellent analysis of why the reparations settlement worked out at Versailles was bound to fail.
Leffler, Melvin C. "The Origins of Republican War Debt Policy, 1921–1923: A Case Study in the Applicability of the Open Door Interpretation." Journal of American History 59 (1972). Explains how domestic public opinion and administration, as well as congressional, views of American fiscal problems, complemented efforts of U.S. leaders to manipulate reparations to create an expansionist world market structure.
Link, Werner. Die Amerikanische Stabilisierungspolitik in Deutschland, 1921–1932. Düsseldorf, 1970. Demonstrates that American, and to a lesser extent British, bankers insisted on reversal of French reparations policy as the major key to U.S. investment in Germany.
Magee, Rhonda V. "The Master's Tools, from the Bottom Up: Responses to African-American Reparations Theory in Mainstream and Outsider Remedies Discourse." Virginia Law Review 79 (1993). Traces failed efforts after 1865 to gain compensation for African Americans, in land or money, for damages resulting from American slavery.
McNeil, William C. American Money and the Weimar Republic: Economics and Politics on the Eve of the Great Depression. New York, 1986. Explains how attracting and allocating foreign loans following the approval of the Dawes Plan became the center of conflict between German political factions and between the Allies and Germany.
Moulton, Harold G., and Leo Pasvolsky. War Debts and World Prosperity. New York, 1932. Although covering events only up to 1932, this is still the most useful account of the complex interrelationships among reparations, war debts, tariff structures, and the requisites of an expanding world economy.
Parrini, Carl P. Heir to Empire: United States Economic Diplomacy, 1916–1923. Pittsburgh, 1969. Shows that reparations were linked to war debts, and that the United States used war debts to force the European powers to modify the reparations settlement, and tried to find a place for Germany in an expanding world market without displacing other industrial states.
Rhodes, B. D. "Reassessing Uncle Shylock: The United States and the French War Debt, 1917–1929." Journal of American History 55 (1969). Asserts that the U.S. government maintained a moderate approach to war debts.
Rix, Alan. Japan's Economic Aid: Policy-Making and Politics. New York, 1980. Examines Japan's postwar foreign aid decision-making process.
Schaller, Michael. The American Occupation of Japan: The Origins of the Cold War in Asia. New York, 1985. Places the occupation within the context of overall postwar U.S. security strategy in East Asia from 1945 to 1950.
Schuker, Stephen A. American "Reparations" to Germany, 1919–33: Implications for the Third-World Debt Crisis. Princeton, N.J., 1988. Asserts, in a revisionist argument reflecting the new international history of the 1920s, that, contrary to the view of John Maynard Keynes, the reparations bill assigned Germany in 1921 was not unreasonable, but in fact reflected a measure of rough political justice.
Temin, Peter. "The Beginning of the Depression in Germany." Economic History Review 24 (1971). Contends that the impact of the reparation payments on investment in Germany had no relationship to the onset of the Great Depression there.
Trachtenberg, Marc. Reparation in World Politics: France and European Economic Diplomacy, 1916-1923. New York, 1980. Examines the reparations dispute after World War I from the French perspective.
U.S. Senate Committee on the Judiciary. Loans to Foreign Governments. Senate Document no. 86. Washington, D.C., 1921. A collection of correspondence on war loans, war debts, and reparations.
U.S. World War Foreign Debts Commission. Combined Annual Reports of the World War Foreign Debt Commission with Additional Information Regarding Foreign Debts Due the United States. Washington, D.C., 1927. Contains much of the correspondence between the U.S. Treasury Department and the British and French governments.