French indemnity

The French indemnity was the indemnity the French Third Republic paid to the German Empire after the French defeat in the Franco-Prussian War in 1871.

An armistice was concluded on 28 January 1871 to allow elections to the French National Assembly. A preliminary peace was signed on 26 February with the Treaty of Frankfurt signed on 10 May.

The Prussian State Ministry on 8 February recommended an indemnity of 1 billion thaler (3 billion francs), 95% of which would be paid to the army. The Prussian Finance Minister Otto von Camphausen said:

The German nation had after all suffered so many additional losses in blood and material goods which are beyond all accounting that it is entirely justified to assess the price of the war generously and in addition to the estimated sum to demand an appropriate surcharge for the incalculable damages.

The Prussian Chancellor Otto von Bismarck sent his personal banker Gerson von Bleichröder to negotiate between the French government and French financial circles.Adolphe Thiers, the head of the French provisional government, offered an indemnity of 1.5 billion francs and claimed that France would be unable to pay 5 billion. Bismarck responded by saying that the Prussian Army would occupy France, "we will see if we can get 5 billion franc from it". Bismarck wrote that "France being the richest country in Europe, nothing could keep her quiet but effectually to empty her pockets".

The French National Assembly ratified the terms by 546 votes to 107.

The indemnity was 5 billion francs (£200 million or $1000 million), with German troops occupying France until it was paid. The 5 billion gold marks, converted using the retail price index in 2011, was worth 342 billion. Converted using the GDP deflater it amounted to 479 billion and substantially more according to other comparisons such as GDP per head.

...
Wikipedia