What 1924 Agreement Reduced German Reparations And Provided U.s. Loans To Germany

By October 14, 2021 Uncategorized

The Dawes Plan led to French troops leaving the Ruhr region. It ensured a significant influx of capital into German industry, which continued to develop and develop. The capital now available to German industry functionally shifted the burden of German war reparations from the German government and industry to American bond investors. The Dawes Plan was also the beginning of relations between German industry and American investment banks. At the end of the First World War, the Allied and Associated Powers included in the Treaty of Versailles a reparations plan to be paid by Germany; 20 billion gold marks were to be paid while the final figure was set. The Germans needed coal for the heating of buildings and for the national production of steel, after losing the Lorraine steelworks at the price of the French. [2] The Dawes Plan of 1924 (developed by a U.S. banker named Charles G. Dawes) was an agreement between the Allies and Germany.

The basic idea behind the plan was to facilitate the payment of reparations by Germany and consisted of two key elements. In late 1923, when the European powers were fixed on German reparations, the Reparations Commission formed a committee to examine the situation. Headed by Charles G. Dawes (Chicago banker, former director of the Budget Office, and future vice-president), the committee presented its proposal in April 1924. In 1925, Dawes was awarded the Nobel Peace Prize in recognition of his contribution to the resolution of the reparations crisis. The Allied victors took a punitive approach against Germany at the end of World War I. Intensive negotiations led to the “war guilt clause” of the Treaty of Versailles, which identified Germany as the only party responsible for the war and forced it to pay reparations. .