When the French and Belgian troops entered the Ruhr on Jan. II, 1923, the Coal Syndicate had transferred their seat and their papers to Hamburg. The German Government issued a protest ( Jan. 12, 1923) ; all reparation payments especially the delivery of coke and coal to France and Belgium ceased. Civil servants and railway officials were forbidden to obey orders from the occupying powers. The French tried to get hold of the proceeds of taxes and of government property. They controlled the distri bution of coal and insisted on cutting timber. They expelled the German officials, railway servants and leading citizens and heavily fined or imprisoned recalcitrants. They erected a customs fron tier, dividing the occupied district from the rest of Germany, thus controlling and stopping exports and imports into unoccupied Germany. The aim of the German resistance was to prevent the French from getting coal and coke, whilst the French tried to cut the connection with unoccupied Germany and to paralyse the district's economic life.
The struggle for the Ruhr completely destroyed German finance and with it German currency. Passive resistance in the long run meant the withdrawal of all workers, starting with the railway men, from such productive and distributive processes as might help the army of occupation. This involved the maintenance of all persons out of work at the public expense. The Ruhr occupa tion was the deciding factor in the collapse of the mark.
Germany's various proposals for a settlement were not accepted by the French, nor were the various suggestions of the British. At last the new German Government, presided over by Strese mann, gave up passive resistance on Sept. 26. The French Gov ernment continued to refuse negotiations and strongly supported the separatist movement all over the left bank of the Rhine.
In Nov., 1923, the industrial concerns in the occupied districts negotiated an agreement with the Mission Interalliee de Controle des U sines et des Mines (called Micum) with the object of free ing the huge iron and coal stocks which had accumulated, as the French Government would not negotiate with the German Gov ernment. It demanded the payments of the German coal tax and the coal on the dumps, whilst the new output could be sold by the works against payment of a duty; the delivery of reparation coal and coke was to be resumed on a percentage basis of the total output. Iron and steel might be sold by the works against payments. The German Government (by letters of Nov. 1 and
21) acknowledged their obligation to refund the cost of payments of delivery to the industries concerned. They did so later on by paying the iron and coal firms 700,000,000 marks.
These provisional arrangements paved the way for peace, after British and American pressure had induced the French govern ment to agree to the appointment of the Dawes committee by the Reparation Commission. The total payments realized from the Ruhr were 490,000,000 gold marks in cash and the value of 491, 900,000 gold marks in goods, leaving a total balance—after de duction of 184,000,000 marks expenses—of 798,000,000 gold marks—or not a third of the minimum payment expected under the London ultimatum.
The new French Government was willing to accept the Dawes plan, to free the prisoners and to leave the Ruhr. The plan was formally signed on Aug. 3o. Within the next two months admin istration, railways and government property were handed back to Germany. The evacuation of the Ruhr ended on July 31, 1925 when the French troops left Essen and Mulheim. On Aug. 25 the old occupied areas of Dusseldorf, Duisburg and Ruhrort were given back.
After political pressure ceased, the mere compulsory economic co-operation of the Treaty of Versailles came to an end. But the German industrialists had realized that France had held the winning cards in the political game, whilst the French Government began to understand the limits of military pressure in the economic field. The result was the Franco-German commercial treaty, and the Franco-German (international) iron-and-steel pact. The for mer secured French iron and steel goods a limited sale in German territory, to be effected through the German Steel Syndicate, whilst the ore and coal supplies were left to more or less private agreements. latter combined French and German and Belgian steel works in an international syndicate, giving each country a fixed percentage of the total output.
The economic unity which the Treaty of Peace had destroyed, was thus being restored by extremely complicated measures, after a six years' struggle between governments and industrial groups, which cost much money and bloodshed. After Germany's entry into the League of Nations and the Locarno treaties the plan of using the Ruhr as an additional security became obsolete.