His task was to carry out the system of increased national taxation which his predecessor Matthias Erzberger had induced the Reichstag to adopt. When in May 1921 the Allied ultimatum on reparations ("London ultimatum") was presented to Germany and the sanctions enforced on the Rhine, the Fehrenbach cabinet, which had rejected the London terms, resigned, and Wirth was called upon to form a new cabinet as "Reichskanzler". He succeeded in obtaining the cooperation of a number of Democrats (DDP) and Socialists (SPD), including the prominent industrialist and economist Walther Rathenau as Minister of Reconstruction. Wirth himself retained the portfolio of finance. The new government then accepted the Allies' reparation terms — 132 billion marks (£6,600,000,000) payable in yearly installments of £100,000,000 plus the proceeds of a 25% duty on German exports. By 31 August 1921, Germany had paid the first half-yearly installment of £50,000,000, and in the following October Rathenau succeeded in concluding a comprehensive agreement with France for paying reparations in kind for the reconstruction of the devastated regions.