The issue of funding does not arise at the beginning of a conflict, during a war,the people live on rations. Belligerents merely suspend the convertibility of their currencies into gold (except England where the pound is convertible), with the idea of restoring them when the war is over. It is doubtful if anyone will ever abandon the system of the gold standard. If a war drags on, two problems may surface: financing military operations, which requires very important material and funding. A war consumes several means and expedients, often very quickly.
It is also worth noting that monetary phenomena are not yet very well understood (inflation and its consequences are virtually ignored) and each time, the winner imagines that at the end of the war, he will be reimbursed by the loser. This explains the inconsistency of the monetary policy.
The expenditure for the year 1918 was about 5 times higher than that of 1914, for Germany, France and England.
Tags - War expenditure, France, Germany, 1914, 1918
[...] They do not all act the same way. Germany could hardly apply to lending countries, and direct taxation though centralized, was not effective. It had recourse to domestic borrowing and issuing tickets : The money was multiplied by 6 during the war, which was obviously the inflation factor. In Russia, the state abused this practice, but could call upon the currencies of its allies (England and France). Britain was privileged : First financial power in the world in 1914, it had large reserves and a (income tax) for efficient tax system : Tax financed 30% of the cost of the war. [...]
[...] Balance Sheet (Source : GH Soutou " how the war was financed "World War P.-M. de la Gorce dir, Flammarion, 1991).: Developed United Great France TOTAL by States Britain Lent to Britain Note that the main debtors of the United States (UK and France) were solvent, which was questionable for England and more for France, which largely lent to Russia. It is understandable that after the war, France wanted the cancellation of inter-Allied debts, unlike the United States, while Britain was quite divided on the question (it lent more than borrowed) . [...]
[...] B / Mixed results : The loans were generally successful. Posters insisted on their role in the final victory : The subscriber was doing his duty and helping in the measurement of these means, the soldiers who fight and who, themselves, paid with their lives gold fight for victory The U.S. even appeared to try to blame : If you cannot fight, subscribe But patriotism does not explain everything : Interest rates were much to the success of the loans. [...]
[...] It should also be noted that monetary phenomena are not yet well understood (inflation and its consequences include almost ignored), and each party expects to be the winner, thinking that they will be reimbursed by the loser at the end of the war. This explains the inconsistency of the monetary policy. I / How to finance? A / The scale of expenditure : The expenditure for the year 1918 was about 5 times higher than in 1914 for Germany, France and England. In total, from 1914 to 1919, France had spent 223 billion francs, while a 1911 study estimated the cost of a war against Germany at 20 billion francs. [...]
[...] This second option was with the Lloyd George government in December 1916. B / Dollar overrode the book : U.S. banks already lent to France and England before 1917. Americans also benefited from redeeming the European values that they had in their territory (liquidation of the capital in the United States). The goal was not, however, to weaken the UK, but to establish with it a sort of financial condominium for after the war. From 1917, entry into the war by the United States led to the victory which solved all the financial problems of the Allied coalition. [...]
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