'It is therefore both in the German and in the Dutch interest...' Dutch-German relations after the Great War. Interwoven economies and political détente, 1918-1933 Jeroen Euwe ‘Het is dus zoowel een Duitsch als een Nederlandsch belang…’ Hendrik Colijn aan de Raad van Bijstand van Economische Zaken, Departement Buitenlandsche Zaken, Den Haag, 28-2-1920. 'It is therefore both in the German and in the Dutch interest...' Dutch-German relations after the Great War. Interwoven economies and political détente, 1918-1931 ‘Het is dus zoowel een Duitsch als een Nederlandsch belang…’ Nederlands-Duitse betrekkingen na de Eerste Wereldoorlog. Verweven economieën en politieke detente, 1918-1931 Proefschrift ter verkrijging van de graad van doctor aan de Erasmus Universiteit Rotterdam op gezag van de rector magnificus prof.dr. H.G. Schmidt en volgens besluit van het College voor Promoties. De openbare verdediging zal plaatsvinden op vrijdag 21 december 2012 om 15.30 uur door Jilles Jeroen Euwe geboren te Vlaardingen Promotiecommissie: Promotor: Prof.dr. H.A.M.Klemann Overige leden: Prof.dr. A. de Jong Prof.dr. J.P.B. Jonker Prof.dr. P.T. van de Laar Contents Acknowledgements i Chapter 1 – Introduction 1.1 Introduction 4 1.2 The Dutch-German economic bonds 7 1.3 The historiography of Dutch-German (economic) relations 11 1.4 Theoretical framework: interdependence theory 17 Proving themselves right: liberal and neo-realist models 20 1.5 Interdependence theories: relevance to this study 24 Complicating factors 26 1.6 Central research question, sub-questions, and composition of the study 29 Chapter 2 – The Netherlands and Germany, 1860-1931 2.1 Introduction 31 2.2 The Dutch and German economies since the 1860s 32 2.3 The German economy up to World War One 35 2.4 The Dutch economy up to World War One 38 The Netherlands: an open economy 42 The First World War: the vulnerability of an open economy 44 2.5 Germany during the first post-war years: political and economic troubles 47 Political stability and economic recovery 51 The golden twenties? 53 Bookends to an era: political instability and economic crisis 58 2.6 The Netherlands after the war 62 2.7 Economic interdependence and interwoven economies: consequences 67 2.8 Conclusion 71 Chapter 3 – Monetary and financial relations 3.1 Introduction 72 3.2 The development of Amsterdam as an international financial centre 76 3.3 The First World War 79 The effects of the war on Dutch-German economic relations 82 Financing trade 84 3.4 Foreign banks in the Netherlands 90 3.5 The impact of German inflation and depreciation, 1918-1924 96 German foreign direct investments 98 The Coal and Credit Treaty of 1920 101 The second wave of German investments 106 Dutch reactions to the German crisis 107 3.6 The development of the Amsterdam capital market 112 3.7 The development of the Amsterdam money market 116 The foreign exchange market 117 The acceptance market 119 3.8 The Depression 129 1 3.9 Financial services and political relations 132 3.10 Conclusion 140 Chapter 4 – Dutch-German trade relations 4.1 Introduction 143 4.2 Dutch-German trade relations up to the First World War 144 The development of Dutch international trade 144 German international trade 146 Dutch-German trade 147 4.3 The First World War and its immediate aftermath: 1914-1920 150 The changing structure of German foreign trade 155 Changing German trade relations 158 Changing Dutch-German trade relations 159 The nature of Dutch-German trade 167 4.4 Dutch-German political relations 173 Dutch ascendancy 174 A new German trade policy 179 The effects of the new German trade policy 189 A conflict about butter 194 A shift in Dutch trade policy 198 4.5 Conclusion 201 Chapter 5 - Transport 5.1 Introduction 206 5.2 Rotterdam and the German hinterland 208 5.3 Transport within Germany 214 5.4 Transport within the Netherlands 220 5.5 Competition between modes of transport 224 Transport policy 224 The German Seehafenausnahmetarife 226 5.6 Competition on the Rhine 238 5.7 Competition with other ports 243 5.8 Conclusion 251 Chapter 6 – Diplomatic relations 6.1 Introduction 253 6.2 Dutch promotion of German interests in international politics 254 6.3 War damages 256 6.4 Border dispute 258 6.5 Conclusions 262 Chapter 7 – Conclusions 7.1 Intertwined economies 263 The economic consequences of war and peace 264 Post-war trade relations 268 The Dutch as financier to Germany 269 2 Transport flows 270 7.2 German economic policies and their effect on Dutch-German relations 272 Further trade conflicts 274 7.3 The resilience of Dutch-German interdependence and its effect on political relations 276 7.4 Interdependence theory 278 Sources 280 Archives 280 Published sources 288 Newspapers 288 Websites 290 Literature 291 Summary in Dutch 329 Curriculum Vitae 344 3 Acknowledgements Working on a dissertation is a pleasure and a privilege. To be paid to do research on an immensely interesting subject, mull things over, and then put the results of all this on paper is an experience that I can heartily recommend to anyone who is by nature a nosy and inquisitive person. I was lucky to have as my promotor Hein Klemann. He was always there for me, whether it was to discuss avenues for further research, discussing chapters of the thesis, and during the final stages of writing the thesis by helping me to keep focused. I hope one day to be able to repay him for his infectious enthusiasm and the interest he has shown both on a professional and personal level. Most of the drafts for chapters of this were discussed at the home of Hein, were I was also fortunate to get feedback from Martijn Lak, my fellow PhD-candidate who worked on the period 1945-1952 for the same research project that this dissertation is a part of, and Ben Wubs, assistant professor at Erasmus University Rotterdam. These meetings were always long but never tiring, always highly motivating and just plain fun. I have fond memories of the talks we had over one of Hein’s delicious home-cooked lunches and dinners. A special word of thanks is also due to the always-friendly Theresa Oostvogels, who found the time amidst her heavy workload to help me navigate the many administrative tasks that come with finishing a dissertation. All Dutch PhD-candidates are required to complete a course at one of the research schools. The nature of my research meant that I was fortunate to attend the Posthumus PhD-course and its European counterpart ESTER during 2006 and 2007. An important part of this course deals with determining the scope of the research, formulating research questions and tightening the structure of the dissertation. To do so, experts from each field of enquiry as well as fellow students are asked to review the various papers that the students have written about their plans. Although I am grateful to everyone who has commented on these papers, a number of people i readily spring to mind. First there is Ben Gales, who organized the course for the Posthumus Institute, and who always had good advice. Then there is Herman de Jong, who suggested I look at how a system such as the Dutch-German economic interdependence reacts to severe shocks, such as the First World War. Similarly good advice was given to me by Mark Spoerer, who introduced me to new methods to gauge interdependence, and which have been of great use during the course of my research. Presenting research findings at conferences is always rewarding. Two particular instances stand out. My very first findings on the role of the Amsterdam financial centre were presented in January 2008 in Paris, at a conference on financial centres as competing clusters. There, I presented a paper entitled ‘Amsterdam as an international financial centre, 1914-1933: a consequence of interwoven economies?’ A few days after my presentation, I received a detailed analysis with hints for further research from Joost Jonker, an expert on the matter, who was also present in Paris (and a recurring presence at many other conferences that I attended). His notes were a great help in expanding that initial ten-page draft into the chapter it has become in this dissertation. At the second conference of the Transnational Rhine Network and at a later presentation at a research seminar at the Erasmus Research Institute of Management I presented a paper on transport flows between Germany, the Netherlands, Belgium and France. At the seminar, Monika Dommann gave me many helpful suggestions for further research, while after the seminar in Rotterdam Hugo van Driel took the time for a long and fruitful discussion about the paper I had presented. Such meetings with like-minded people, at conferences, in the archives, and other get-togethers are a welcome change from what can sometimes be days spent alone, writing. Months were of course spent in various archives, both in the Netherlands and in Germany, usually surrounded by other enthusiasts, diligently ploughing the archives. Everywhere I was extended a friendly welcome, and I hope to revisit them all in the future. ii Although writing a dissertation is a joy and a privilege, it can also be engrossing to such an extent that the social aspects of life can suffer, especially when there are deadlines to be met. I would be remiss if I did not thank my loving parents, my wonderful girlfriend Marjolein, and all of my friends for their understanding and support. Prepare for dinner invitations and such! iii Jeroen Euwe 1 Chapter 1 - Introduction 1.1 Introduction ‘Just why do the Netherlands still exist?’ was the provocative question fielded by Hein A.