The Fehrenbach cabinet resigned on 4 May 1921 when it was unable to reach a decision on whether to accept the
London Schedule of Payments, which set German war reparations at 132 billion gold marks. The
London ultimatum issued on 5 May threatened an Allied occupation of the
Ruhr if Germany did not accept the terms within six days. The Centre and SPD were in favour of accepting the London Schedule in spite of the anger it had aroused in the German public. Since Wirth was the only candidate for chancellor whom the SPD would accept, and no government could be built without them, Wirth and the Centre Party formed a coalition on 10 May with the SPD and the
German Democratic Party (DDP). and
Walther Rathenau, then
minister of Reconstruction, concluded a comprehensive agreement with France for paying reparations in kind for the reconstruction of the devastated regions of the country. The fulfilment policy was quickly broken off due to the problems of financing it. In December 1921, Germany had to request a postponement of the next payment. The strife which arose out of the crisis in Bavaria had only just abated when in mid-October the
League of Nations' announcement of the partition of
Upper Silesia between Germany and
Poland aroused considerable anger throughout Germany. Almost sixty per cent of the vote in the
March 1921 plebiscite in ethnically mixed Upper Silesia was in favour of staying part of Germany, but the heavily industrialised eastern part of the region was nevertheless awarded to Poland. Wirth believed that its severance from Germany would fatally affect Germany's capacity to pay its reparations. On 22 October 1921, he resigned in protest over the partition. Three days later, President Friedrich Ebert once again asked him to form a government, which Wirth did on 26 October with the
second Wirth cabinet.
Second term , minister of Finance in the second Wirth cabinet, was assassinated by far-right extremists on 24 June 1922. On 16 April 1922, Wirth and Walther Rathenau signed the
Treaty of Rapallo, under which Germany and
Soviet Russia renounced all war-related territorial and financial claims against each other and opened friendly diplomatic relations, a move which ended Germany's post-war foreign policy isolation. and famously proclaimed: There stands the enemy, who drips his poison into the wounds of a people. There stands the enemy, and about it there is no doubt: the enemy is on the Right! On 21 July 1922, the Reichstag passed the
Law for the Protection of the Republic on the initiative of the Wirth government. It increased the penalties for political assassinations and banned organisations opposed to the "constitutional republican form of government" along with their printed matter and meetings. Wirth tried to extend his government's minority coalition to the right to include the DVP, but even his own Centre Party was becoming increasingly unhappy at having to work with the SPD, which had reunited with the more radical
Independent Social Democrats (USPD) in September 1922. After the government lost a key vote on the grain levy in November, the government resigned. On 22 November,
Wilhelm Cuno, a political independent, replaced Wirth as chancellor. == Post-chancellorship ==