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By the 1880s, the Scramble for Africa was in full swing, and the neighboring French and British colonial establishments' efforts, supported by some local elites, to secure a dominant position on the Togolese coast alarmed the German merchants of Aneho. They appealed to the imperial government in Berlin to intervene, and in 1884 Gustav Nachtigal, one of Germany's foremost African strategists, concluded a treaty with the chief of a small coastal village called Togo. The treaty granted Germany an exclusive protectorate over the entire coast of Togoland, which derived its name from this tiny chiefdom. The Germans quickly assumed control of the mostly Ewe region near the coast, but began their conquest of the interior only after 1893. They successfully subdued the north by 1897, although they confronted minor rebellions during the next few years. In 1897 they chose Lome, until then a small fishing village, as the colonial capital.
Exports of Ewe-produced palm oil, along with a harsh system of taxation, resulted in a positive financial balance for the colony by 1907. For this reason, the Germans referred to Togo as their Musterkolonie, or "showcase colony." The Germans required 12 days of forced labor yearly from every able-bodied male in the colony, or a cash payment calculated on the basis of an individual's (often non-cash) income. Forced labor was deployed primarily on public works projects, such as the pier at Lom?, completed in 1904, and a series of railroads radiating out from the capital to the major cash-crop production zones in the south.
The possibility of substituting a cash payment for forced labor encouraged many Togolese to cultivate cash crops or accept wage labor. Germans enlisted researchers, including several from the Tuskegee Institute of Alabama, in finding a variety of cotton suited to the climate, and cotton became one of the colony's major exports. Though a few German settlers managed plantations, the colonial administration left production of both subsistence and cash crops mostly in the hands of Togolese, while German firms on the coast handled processing and export. Ownership of cocoa plantations in the mountainous interior provided the basis for an indigenous, mostly Ewe, bourgeoisie. Together, these developments yielded steadily increasing export earnings as well as the growth of a class of wage laborers, particularly in the south, no longer tied to subsistence agriculture. The Germans also recruited Togolese, especially Ewe educated in mission schools, to positions in the local administration.
When World War I broke out in 1914, France and Great Britain invaded Togo from neighboring Dahomey and the Gold Coast, and within a month had seized the entire colony. In 1919 the two countries agreed to partition German Togoland into two League of Nations mandates. France received the eastern two-thirds, including Lom? and the entire coastline and rail network, and Britain received a strip of land bordering its Gold Coast colony (modern-day Ghana).