Map of the occupation of the Rhineland
The Ruhr region had been occupied by Allied troops in the aftermath of the First World War. Under the terms of the Treaty of Versailles (1919), which formally ended the war with the Allies as the victors, Germany accepted responsibility for the damages caused in the war and was obliged to pay war reparations to the various Allies. Since the war was fought predominately on French soil, these reparations were paid primarily to France. The total sum of reparations demanded from Germany—around 226 billion gold marks (US $899 billion in 2019)—was decided by an Inter-Allied Reparations Commission. In 1921, the amount was reduced to 132 billion (at that time, $31.4 billion (US $442 billion in 2019), or £6.6 billion (UK£284 billion in 2019)). Even with the reduction, the debt was huge. As some of the payments were in raw materials, which were exported, German factories were unable to function, and the German economy suffered, further damaging the country's ability to pay.
By late 1922, the German defaults on payments had grown so regular that a crisis engulfed the Reparations Commission; the French and Belgian delegates urged occupying the Ruhr as a way of forcing Germany to pay more, while the British delegate urged a lowering of the payments. As a consequence of a German default on timber deliveries in December 1922, the Reparations Commission declared Germany in default, which led to the Franco-Belgian occupation of the Ruhr in January 1923. Particularly galling to the French was that the timber quota the Germans defaulted on was based on an assessment of their capacity the Germans made themselves and subsequently lowered. The Allies believed that the government of Chancellor Wilhelm Cuno had defaulted on the timber deliveries deliberately as a way of testing the will of the Allies to enforce the treaty. The entire conflict was further exacerbated by a German default on coal deliveries in early January 1923, which was the thirty-fourth coal default in the previous thirty-six months. Frustrated at Germany not paying reparations, Raymond Poincaré, the French Prime Minister, hoped for joint Anglo-French economic sanctions against Germany in 1922 and opposed military action. However, by December 1922 he saw coal for French steel production and payments in money as laid out in the Treaty of Versailles draining away.