The reparations issue and the Dawes Plan

Why was the US interetsed in Germany?

The USA vested interest in getting Germany back to a position where reparations could be made to France, because much of this money was then passed on to the USA to repay loan

Who was Charles dawes?

American banker Charles Dawes acted as the new committee’s chairman

When was the Dawes plan finalised?

April 1924

What had happened before the Dawes plan finalised?

By the time the Dawes plan was finalised Stresemann’s government had fallen but he remained as foreign secretary and took credit for much of what was achieved

What did the Dawes plan do?

The Dawes Plan confirmed the original figure of a total reparations payment of £6.6 billion but made the payments more manageable

What did the Dawes plan advise?

It recommended that:

• Until 1929 the amount paid each year by Germany should be reduced after the situation would be reappraised

• It proposed that Germany should re-start reparations by paying 1000 million marks (a fraction of what had been expected before) and that this sum should be raised by annual increments over five years by 2500 million marks per year

• After this, the sum paid should be related to German industrial performance

What year would the reperatioons stopped being reduced by the Dawes plan?

After 1929 the amount paid each year by Germany would stop being reduced after the situation would be reappraised

What was the reduced amount of marks that the Germans would start paying in reparations?

• It proposed that Germany should re-start reparations by paying 1000 million marks (a fraction of what had been expected before)

• That this sum should be raised by annual increments over five years by 2500 million marks per year

How much would Germany receive form the Dawes plan?

Germany should receive a large loan of 800 million marks from the USA to help get the plan started and to allow for heavy investment in German infrastructure

How was the Dawes plan viewed in the Reichstag?

• The Dawes Plan was controversial in the Reichstag

• Stresemann himself did not actually believe in the plan, privately referring to it as ‘no more than an economic armistice’, but he agreed to it as a way of securing foreign loans

What was a reason for why people opposed the Dawes plan?

‘National opposition’ (mainly the DNVP, but also smaller right-wing groups like the Nazi movement) attacked this policy of compromise, since they believed Germany should defy the unjust Versailles Treaty and refuse to pay reparations altogether

When was the Dawes Plan agreed on?

July 1924 the Dawes Plan was eventually agreed and accepted by both Germany and the Allies

What benefits did the Dawes plan bring?

• The Allies accepted that Germany’s problems with the payment of reparations were real

• Loans were granted, with which new machinery, factories, houses and jobs could be provided and the German economy rebuilt

• The French gradually left the Ruhr during 1924–25, once it became clear that Germany was going to restart paying reparations

• The improvements made the Germans optimistic that they were gaining back control

What did the Dawes plan do for international relations?

The Allies accepted that Germany’s problems with the payment of reparations were real

What did the Dawes Plan do for German infrastructure?

Loans were granted, with which new machinery, factories, houses and jobs could be provided and the German economy rebuilt

What did the Dawes plan do for the Ruhr?

The French gradually left the Ruhr during 1924–25, once it became clear that Germany was going to restart paying reparations

How did the effects of the Dawes Plan do to the people?

The improvements made the Germans optimistic that they were gaining back control