Road Less Traveled: WW1 negotiated peace in 1916/17

Germany can’t afford a peace where it doesn’t receive a massive reparations bucket of cash from the Entente. Border shifts, buffer states, colonies etc. is just window dressing.
I was reading this article on german war finance and it was quite illuminating.

"Germany’s debt grew tremendously during the war, but so did that of its enemies and allies. Its annual deficit hovered around 90 percent of total government expenditures in the second half of the war. Yet these deficits were only moderately higher than either France (80 to 85 percent) or Great Britain (70 to 75 percent). By the end of the war overall public debt of these three nations as a percentage of GDP had reached comparable levels.

YearU.K.FranceGermany
191461.354.873.5
191579.879.494.4
191675.086.692.7
191776.186.190.8
191869.280.093.8

Germany relied slightly less on taxation and slightly more on debt than did Great Britain. The Berlin money market absorbed less of its government’s short-term floating debt than did the money markets in London and Paris. Germany found it harder to raise funds abroad; its debt and the inflationary consequences of that debt remained firmly anchored in the domestic economy. And finally, its loan banks fostered a false sense that the German currency was still firmly anchored to gold, even though that ceased to be the case well before the end of the war.

Yet, as numerous historians have pointed out, inflation after the war could have been managed had the international climate been less acrimonious, the burden of reparations less severe, or the German leaders not pursued a policy of non-fulfillment. The mark, after all, stabilized against the dollar in late 1920 and early 1921, and inflation briefly reached an annual level of just 2 percent before the London reparations ultimatum of May 1921"


Seems to me like Germany could narrowly avoid hyperinflation and some of these problems as German problems partially came first in 1918 as a result of high reparations and Weimar leaders’ policies. Of course depends on the war agreement, reparations, and the like. 2 years of less warfare would spare germany a lot of costs.
 
I was reading this article on german war finance and it was quite illuminating.




Seems to me like Germany could narrowly avoid hyperinflation and some of these problems as German problems partially came first in 1918 as a result of high reparations and Weimar leaders’ policies. Of course depends on the war agreement, reparations, and the like. 2 years of less warfare would spare germany a lot of costs.
I don't think that figure is debt as percentage of GDP but government expenditures as percentage of revenue (I.e. deficit)


The table has the title:

Table 1: Government Budget Deficits as a Percentage of Expenditures

Because a big problem Germany was it's GDP went down during the war



What makes this more complicated is it's not so much about the headline figures but how it's done, and the knock on effects on daily life:


Banking, the Money Market and the Monetization of German War Debt↑

Germany’s main financial problem, however, was the explosion of public spending caused by the Hindenburg Program. Despite the popularity of its war bonds, by the end of 1916 the German government was spending significantly more than it was taking in either through its long-term loans or through taxation. After 1916, the federal government’s short-term floating debt grew relentlessly and by the end of the war it accounted for over 30 percent of the federal government’s total debt. This situation created the potential for serious inflation. Any short-term debt not purchased by German banks or placed in the Berlin money market had to be bought by the Reichsbank, which printed new paper money to do so.[9]

This is where important differences began to appear between Germany’s war finance and those of its western foes. Both Great Britain and France had deep money markets, Britain in particular, which were willing and able to buy short or medium-term government bills in large quantities. By contrast, the German money market was much younger and still developing. At the beginning of the war German banks purchased relatively few short-term government bills, yet this was of little consequence because the proceeds of the semi-annual long-term war loans were large enough to soak up Germany’s short-term, floating debt. After 1916 German banks began to purchase more of the government’s floating debt, in large part because this debt began crowding out private commercial bills. But the new appetite of German banks for public short term debt was still not enough to offset the massive increase in expenditures associated with the Hindenburg Program.[10]

By contrast, the deep money markets of Great Britain and France paid dividends because they enabled their governments to place large quantities of short-term debt, and thereby help limit the growth in the money supply. After March 1915 approximately 32 percent of German war debt was floating on a regular basis; in Britain the figure was just 18 percent. As the Reichsbank purchased ever more short-term bills to pay for the Hindenburg Program, it printed more paper money to do so. German debt, in other words, became monetized and the volume of new currency exploded. German currency in circulation rose 599 percent over the course of the war, more than its rivals to the West, although less than its rival to the East. Great Britain and France saw an increase of money in circulation of 91 and 386 percent respectively; Russian paper currency in circulation increased by an astounding 1,102 percent. The German government managed to keep a lid on price inflation and the overall cost of living, but only by imposing price controls on consumer goods. These controls distorted the market price of goods, contributing to shortages, allocation problems and the rise of black markets across Germany
 
Bethmann could have very well been sincere in pulling out of Belgium, but the problem is that Germany had no clear war aims. The civilian government wanted a much more lenient peace that would minimize gains (if any were to be made) while the military had no idea what they wanted, just that they wanted something. Finding a way to bring those two together is essential for any peace that isn’t a decisive victory for one side or the other, and frankly I don’t see a realistic scenario where it happens. If the Germans think they’re winning, the army insists on continuing the fight and if they’re losing the Entente will probably want to finish them off.

By the time they get to a peace conference, what the military leadership wants is irrelevant.

All of this might be true, but irrelevant. In order to make the case that a real chance for peace was missed, Zelikow would have to prove that a) the German civilian leadership wanted a white peace, and b) they could over-ride the wishes off the military high command. Since the German high command believed they could win as late as spring 1918, that seems unlikely.

Zelikow makes a very convincing case that, through 1916, that was indeed the case.
 
But they don't get to a peace conference if the Army high command don't agree.

And the chancellor had them in hand well enough and the support of the Kaiser well enough for it to be viable throughout 1916.

Honestly, I can’t really defend every detail the book covers anywhere near as well as Zelikow could theoretically explain. His conclusion was that the high command would not be an insurmountable obstacle.
 
So the consensus is that "something" has to happen to incentivize the parties to actually commit to negotiations and they there needs to be serious reasons for the discussions to actually end in a peace treaty. Very interesting thread that gives me a lot of background ideas...

Too bad we can't use the idea of a "common threat" but that's more a "Road Not Taken" than one less traveled :)

Randy
 
Right which kind of goes to the point about Wilson trying to force the entente to a "reset the 1914 borders" peace, it's not a victory and all you really have is a pissed of Entente and CP
The argument Zelikow goes for, which I think is at least fairly plausible, is that since all of the belligerents painted themselves as holding off the aggression of their adversaries, a white peace is a victory: you held off the ravaging enemy horde and sent them home empty handed.

It might be a tough sell, but it's at least an angle.
 

kham_coc

Kicked
So the consensus is that "something" has to happen to incentivize the parties to actually commit to negotiations and they there needs to be serious reasons for the discussions to actually end in a peace treaty. Very interesting thread that gives me a lot of background ideas...

Too bad we can't use the idea of a "common threat" but that's more a "Road Not Taken" than one less traveled :)

Randy
[/QUOTE]

Earlier Irish rising (maybe a real fear that the The USA decides to intervene, even if only a phony stance by wilson), or a Russia that does a lot worse early on, thus encouraging the entente to step out.
 
Perhaps it's rude for me to plug the POD I've been working on for a while, but maybe someone will find it useful.

Basically, Nikolai II and Brusilov are killed in an Austro-Hungarian bombing raid in April 1916 in Ukraine. Alexandra will most likely become regent for Alexei briefly, but she'll be replaced by Mikhail, supported by the liberals and the army. There is no Brusilov offensive, however, which leaves Austria-Hungary in a better state. I have a book on Mikhail, though I haven't read it, so I don't know what his opinion on a negotiated peace would be. I think there's a chance he could agree to one, as he can end the war without ditching his allies.

Off the top of my head, the major fronts probably look something like this:
Verdun: Very bloody of course, but the French are still getting the better of the Germans here.
Somme: Without the Brusilov offensive, hopefully Falkenhayn can commit more troops to the Somme sector, causing the Anglo-French forces to make less progress.
Italy: Conrad's Asiago offensive will still peter out, but Sixth Isonzo will likely be largely blunted without the Brusilov offensive demanding A-H's attention.
Overall Eastern Front: Russia will make some offensives (similar to Lake Naroch and Baranovichi) to relieve pressure on France, but I doubt they'll make much progress.

Overall, I'd say the fronts are pretty balanced, I might add a worse Jutland for good measure to hurt British morale.
 
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Maybe a voluntary population transfer, although my brief experience with people of Alsace, has given me some impression that they consider themselves a distinct identity that isn't entirely French; but given the large sums of cash the Reichstag was pumping into A/L to modernize it's infrastructure, and to fully integrate them into the Reich, I would be very dubious of even a 1/4 of the population choosing to relocate to France; QOL and economic prosperity/opportunity for young families was much higher under German management at that time period
My great grandparents were part of those Alsatians who refused to accept German citizenship and became refugees as they had to sell up in a hurry and leave to remain French. They very much would want a say and had demonstrated their views by their sacrifice to remain French and build a new life in the Cevennes.
 
How countries would get judged, 1 being completely pointless, 10 being justified.

Russia: 2, lots of dead, much treasure spent over Serbia. Second failed war this century. Proved to be not in the same league as the Germans militarily.
Germany: 8, although many lives were lost, Germany gains a bit of colonial territory, and defeated the encirclement and backed up her flailing confederate Austria, The army having such a high place in German society and the fact they suffered less casualties vs. their enemies, means less judgement. The biggest judgment will be from militarists that thought Germany just threw away her big victory for a near white peace (but actual civilians who suffered through the recent Turnip Winter would know better).
Austria: 6, Austria proved pretty inept by 1917, and most of her neighbors jumped in to pick on her during her weakness, obviously a German dependency now, but survived and got to punish Serbia with a year of occupation, and the Germans and Hungarians are still in charge, could be worse.
France: 7, Didn't have much choice but to get involved, lots of casualties per capita especially, but survived and defended the country.
England: 5, Had more choice than France to enter, but Navy proved competent, If they can pick up a bit of colonial territory, wont be too many complaints.
Italy: 1, lots of casualties, nothing gained, couldn't even beat the Austrians
Britain if you please. England is a nation but not a state and merits more than being a lazy synonym for the United Kingdom.
 
And the chancellor had them in hand well enough and the support of the Kaiser well enough for it to be viable throughout 1916.

Honestly, I can’t really defend every detail the book covers anywhere near as well as Zelikow could theoretically explain. His conclusion was that the high command would not be an insurmountable obstacle.
It seems if Germany gets at least something out of the war, Angola or the Belgian Congo, maybe Britain gets Basra, and the Ottomans are then off the Red Sea and Persian Gulf (increasing the security of the canal and Britain's sources of oil) and Belgium is liberated, (Germany should be happy enough to agree to a naval holiday or build agreement since she wouldn't be able to afford much naval production anyway). It seems the biggest players on each side would be satisfied and could survive politically. Everyone else has to follow along once those two are ok with it.

The German military has a few glorious victories to brag about, Tannenberg, Gorlice, etc. Even the Navy has Jutland where they matched up against Britain and the exploits of the Emden, this military still doesn't have to worry about their place in society, even if socialists parties are winning at the ballot box, the armed forces will be around to make sure the state remains conservative generally.

Germany's biggest other concerns would be ensuring Austria at least doesn't lose anything and that the high place of Germans in that empire is upheld.
 
The argument Zelikow goes for, which I think is at least fairly plausible, is that since all of the belligerents painted themselves as holding off the aggression of their adversaries, a white peace is a victory: you held off the ravaging enemy horde and sent them home empty handed.

It might be a tough sell, but it's at least an angle.
Right but I think the reality of needing the big victory to justify the costs paid (and for other reasons) will be much stronger. Plus costs have been paid unevenly so compensation will also be uneven. Take France, France has had it northern quarter occupied and trashed for two years, massive forced movement of peoples plus what's been going on in occupied parts. All damage inflicted by an invading party, they will want recompense for that. But flip the coin there's no occupying army inflicting damage on German soil. So there is no way France is going to accept a white peace without getting compensation, and it's unlikely Germany will accept a white peace that involves paying France a satisfactory amount of compensation.

If nothing else it easily countered by "but if we don't punish the other side for their aggression they will just do it again" . See also "if we don't leave the otherside in a position where they can't do it again , then they will do it again"

The problem is if that Zelikow's idea it's an idea that based around giving everyone a plausible face saving way out that allows them to seek peace, but that presupposes that everyone* would welcome such a face saving excuse because they are actively seeking peace in 1916. And they're not.


There's another big problem with the idea of buying into everyone thinking they're the aggrieved victim of others aggressive foreign policy, in that its just not equally true for all involved! But perhaps more importantly in practical terms the US has not been saying that or acting is if it were true for two years either. We've had too much "rampaging Huns standing over the dishevelled bodes of Belgium and Northern France", to sell this idea of 'well it was everyone really' narrative i.e. it's too much of a tonal shift.

This is kind of what happened to a lesser extent in 1919 in response to Wilson's 1918 14 points in congress. The collective response from the Entente was pretty much "er what planet have you been on for the last 4 years".






*and it would need to be everyone because it needs everyone to buy into the narrative, just one voice saying hang we've had it worse so you need to pay more will fuck it.
 
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It seems if Germany gets at least something out of the war, Angola or the Belgian Congo, maybe Britain gets Basra, and the Ottomans are then off the Red Sea and Persian Gulf (increasing the security of the canal and Britain's sources of oil) and Belgium is liberated, (Germany should be happy enough to agree to a naval holiday or build agreement since she wouldn't be able to afford much naval production anyway). It seems the biggest players on each side would be satisfied and could survive politically. Everyone else has to follow along once those two are ok with it.

The German military has a few glorious victories to brag about, Tannenberg, Gorlice, etc. Even the Navy has Jutland where they matched up against Britain and the exploits of the Emden, this military still doesn't have to worry about their place in society, even if socialists parties are winning at the ballot box, the armed forces will be around to make sure the state remains conservative generally.

Germany's biggest other concerns would be ensuring Austria at least doesn't lose anything and that the high place of Germans in that empire is upheld.
So the message is you can invade Belgium and get paid to leave with Belgium's colonial possessions (not trying to be combative but that is how that will play)

and why in 1916 would the Ottomans agree to losing chunks of it possessions to Britain. (even Wilson in his 14pts in 1918 was to maintain Ottoman territory)

What about France, they going to accept getting nothing for all the damage they've suffered on their land.

No one's going to go for that naval agreement because this peace it not going to last, instead everyone is going rearm

But the biggest issue for me with the above is it's based around what does Germany want, and there's more than Germany with wants here. Don't get me wrong I get you are saying this might get Germany to the table, but you have to get everyone to the table.
 
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The military may be less of a problem if Falkenhayn can hang on to his position, as he was trying to bring Russia to a separate peace deal. I think he'd be much more amenable to a negotiated settlement than Ludendorff.
In the end, I think the only ultimate red lines for the army high command regarding withdrawal from occupied French and Belgian territories - especially if Falkenhayn is still around, of if a strong Cancellor is keeping them in line - would be an insistence on retaining and annexxing the Briey-Longwy ironfields and Vosges front slopes in France, and a handful of Belgian border fortresses.

(however, I'd say that any retrocession of Elsaß Lothringen would be out of the question. Maybe a voluntary population exchange program for those few elements of the population who'd strongly desire to move to France, and some guarantees of French-speaking minority rights in the territory).
 
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Right but I think the reality of needing the big victory to justify the costs paid (and for other reasons) will be much stronger. Plus costs have been paid unevenly so compensation will also be uneven. Take France, France has had it northern quarter occupied and trashed for two years, massive forced movement of peoples plus what's been going on in occupied parts. All damage inflicted by an invading party, they will want recompense for that. But flip the coin there's no occupying army inflicting damage on German soil. So there is no way France is going to accept a white peace without getting compensation, and it's unlikely Germany will accept a white peace that involves paying France a satisfactory amount of compensation.

If nothing else it easily countered by "but if we don't punish the other side for their aggression they will just do it again" . See also "if we don't leave the otherside in a position where they can't do it again , then they will do it again"

The problem is if that Zelikow's idea it's an idea that based around giving everyone a plausible face saving way out that allows them to seek peace, but that presupposes that everyone* would welcome such a face saving excuse because they are actively seeking peace in 1916. And they're not.


There's another big problem with the idea of buying into everyone thinking they're the aggrieved victim of others aggressive foreign policy, in that its just not equally true for all involved! But perhaps more importantly in practical terms the US has not been saying that or acting is if it were true for two years either. We've had too much "rampaging Huns standing over the dishevelled bodes of Belgium and Northern France", to sell this idea of 'well it was everyone really' narrative i.e. it's too much of a tonal shift.

This is kind of what happened to a lesser extent in 1919 in response to Wilson's 1918 14 points in congress. The collective response from the Entente was pretty much "er what planet have you been on for the last 4 years".






*and it would need to be everyone because it needs everyone to buy into the narrative, just one voice saying hang we've had it worse so you need to pay more will fuck it.


Only problem is if that one voice is the odd one out, and all their allies are happy with the treaty as is... well what is that voice going to do, fight the entire opposing coalition by itself?
 
So the message is you can invade Belgium and get paid to leave with Belgium's colonial possessions (not trying to be combative but that is how that will play)

and why in 1916 would the Ottomans agree to losing chunks of it possessions to Britain. (even Wilson in his 14pts in 1918 was to maintain Ottoman territory)

What about France, they going to accept getting nothing for all the damage they've suffered on their land.

No one's going to go for that naval agreement because this peace it not going to last, instead everyone is going rearm

But the biggest issue for me with the above is it's based around what does Germany want, and there's more than Germany with wants here. Don't get me wrong I get you are saying this might get Germany to the table, but you have to get everyone to the table.

Agree with this mostly, the people you have to please are the German and British nationalists since they are the most powerful countries. If they agree everyone else has to fall in line. There were OTL suggested proposals that Germany gets the Belgian Congo for peace, Belgium was very worried about this OTL. Perhaps the Germans and British split up the Portuguese empire that works too.

Peace just may not be possible really. Just going with the OP notion that it was possible.

I think it more likely to happen if Germany decided not to do unrestricted submarine warfare, USA not in, the Neville offensive fizzles out, May 1917 the Allies are having financial issues (especially Kerensky Russia without USA loans), but the Germans don't realize this financial trouble, fear another blockade turnip winter. Then both sides think they are weak and in trouble. Then peace could happen.
 
I think it more likely to happen if Germany decided not to do unrestricted submarine warfare, USA not in, the Neville offensive fizzles out, May 1917 the Allies are having financial issues (especially Kerensky Russia without USA loans), but the Germans don't realize this financial trouble, fear another blockade turnip winter. Then both sides think they are weak and in trouble. Then peace could happen.

That is more or less the thrust of Zelikow’s book.

Also, pretty hard to justify dismantling neutral Portugal’s colonial empire in a peace conference.
 
Only problem is if that one voice is the odd one out, and all their allies are happy with the treaty as is... well what is that voice going to do, fight the entire opposing coalition by itself?
Thing is most countries are fighting because they are in mutual treaties with others, that does carry weight. (and if you piss all over your mutual aid treaties now when push comes to shove who's going to go in with you next time?)

Plus Britain can't leave Belgium and France out to dry here its entire rationale for fighting for the last two years was the opposite of that.
 
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