History
Dawes Plan
The Dawes Plan was an agreement made in 1924 to address Germany's inability to meet reparation payments after World War I. Named after American banker Charles G. Dawes, the plan restructured Germany's reparation payments and provided the country with loans to stabilize its economy. The Dawes Plan aimed to reduce tensions and promote economic recovery in Europe.
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eBook - PDFGerman Reparations, 1919 - 1932
A Historical Survey
- L. Gomes(Author)
- 2010(Publication Date)
- Palgrave Macmillan(Publisher)
This worry fuelled fears that transfer protection and other Dawes safeguards might break down, with disastrous consequences. In October 1928, an alarmed Morgan partner, Russell Leffingwell, warned that the Dawes Plan had become a ‘house of cards’. 36 By this time, the American bond market was effectively closed to German borrowers. American banks had already reduced Germany’s credit rating, and existing German bonds were being marked down. 4.3 The Young Plan Searching for a final reparations plan Towards the end of 1927, Gilbert decided the time had come for the Dawes stopgap to go, and made proposals for an orderly revision of it. This had to be done to forestall a chaotic breakdown of the whole Dawes machinery. In collaboration with officials in Washington and Wall Street bankers, he set to work on the outlines of a revised repara- tions plan. Gilbert publicly signalled the need for change in his third annual report of 10 December 1927. Here, he called for a final fixing of Germany’s total reparation obligations, the abolition of transfer protec- tion and an end to foreign supervision of German finances. During autumn the following year (1928), Gilbert had a series of conversations with political leaders, going from country to country whipping up sup- port for his proposals and urging the appointment of a new committee of experts to revise the Dawes Plan. From Dawes to Young 167 The ministers and foreign bankers he met were aware of the fragil- ity of the current Dawes arrangements (as noted above), but there was little consensus on the remedies proposed by Gilbert. According to the Agent General, the Dawes Plan opened the international capital market to Germany and restored investor confidence; but the foreign credit resources were abused by the German authorities through reckless fis- cal policies and unsustainable levels of borrowing. Such irresponsible behaviour would soon lead to a loss of access to foreign credit markets.
- James W. Gantenbein(Author)
- 2019(Publication Date)
- Columbia University Press(Publisher)
T h e Dawes Plan, which was intended to be merely provisional for the purpose of meeting the existing situation, provided for payments ranging from one billion marks the first year to 2.5 billion marks in the fifth year, in-cluding interest and amortization on a new international loan of $200,000,000 forming a part of the plan. A transfer committee, headed by the Agent General 116 T H E I N T E R G O V E R N M E N T A L DEBTS As to the relation of reparations payments received by the debtor countries to the debts owed to the United States Govern-ment, the United States has consistently declined to make the debt payments to this country contingent upon reparations re-ceived by the debtor nations. This issue became prominent during the discussions with France in the fall of 1925, when negotiations were interrupted for several months owing partly for Reparation Payments, was set up to receive the stipulated payments and to arrange for their transfer to the creditor governments. At the end of 1928, the so-called Young Committee, headed by Mr. Owen D. Young, was established by the German, Belgian, French, British, and Japa-nese Governments as a committee of independent financial experts to draw up proposals for a complete and final settlement of the reparation problem. The Young Plan, which was worked out in Paris in February-June, 1929, and whose basic principles were incorporated in agreements made at two confer-ences at The Hague shortly afterward, established a schedule of unconditional and conditional payments over a period of 59 years. These payments were for a long time to be substantially under the 2.5 billion marks previously set as the standard Dawes annuities, rising by degrees from 1,707,900,000 marks in the twelve-month period 1930-1931 (742,800,000 marks were to be paid in a seven-month period in 1929-1930) to 2,042,800,000 marks in 1939-1940, and to a maximum of 2,428,800,000 marks in 1965-1966, after which they were to decline.
eBook - PDFAmerican Money and the Weimar Republic
Economics and Politics on the Eve of the Great Depression
- William C. Mcneil(Author)
- 2019(Publication Date)
- Columbia University Press(Publisher)
12 German industry had been assessed large shares of Germany's reparation debt, and those debts were backed by a first mortgage on industrial assets. The Americans wanted to back their own loans with a first mortgage on German industry, and to do this, they wanted industry to sell international bonds to buy out their Dawes Plan debt. 13 The Americans viewed their demand as a business proposition aimed at making a sound loan, but the political implications of the demand were monumental. It was generally felt that any part of the Dawes Plan debt taken by international bankers and sold on the world capital market would be safe from German repudiation. Ger-many might welsh on its reparations payments, but to refuse to pay off a legitimate international loan held by private foreign investors would be unthinkable. Thus, France and to a lesser degree Britain hoped to commercialize the reparations bonds in order to firmly commit Germany to paying. When Dillon Read set this as a precondition for its loan, it was, in 74 Politics and Foreign Loans, 1925 effect, assuming the role of enforcer of the Dawes Plan. With this demand, the German industrialists and the American bank-ers stood in direct confrontation; either the Americans had to back down or Germany had to openly accept its reparations debt. The outcome of this confrontation would provide the first test of the ability of American bankers to influence German policy when it involved a matter of vital interest to Germany. This newest development prompted the Thyssen nego-tiators, Barth and Rabes, to ask Thyssen's home office for permission to seek a separate loan. With this permission in hand, they immediately confronted Dillon Read. They protested the plan to commercialize the reparations debt and told Dillon Read that we are no longer willing to tolerate the slow rate of progress on the loan project. They insisted that a firm of Thyssen's stature could easily find another bank with which to do business.
- G. Johnson(Author)
- 2015(Publication Date)
- Palgrave Macmillan(Publisher)
Resolving Allied tensions The deliberations of the British, French and Belgian members of the Dawes Committee reflected the tensions and divisions that had hitherto undermined European attempts to find a solution to the reparations question. 36 Yet, unlike the earlier reparations conferences, the discus- sions did not collapse. With the safety net of American financial assis- tance now in place, the European Allies were able to agree a common agenda for reparations payments. The focus for discussion was no longer on what divided national interests, but how Europe as a whole could benefit from American loans. 37 One of the main advantages to the British government was the possibility of improving relations with France. The tensions in Anglo-French diplomacy created by the Ruhr The Challenge of the United States, 1922–24 77 crisis were now partly set to one side. The financial resources available to the American government made it expedient for national pride to be swallowed and national differences played down. The British and French were confident that the Dawes Plan provided a solution to one of the most complex and controversial problem areas in European affairs since the war. Much of the credit for the revitalisation of Anglo- French relations was due to the new British Prime Minister, Ramsay MacDonald. His strong pro-American sympathies combined with a good relationship with his French opposite number, Herriot, brought about a change of emphasis in official British attitudes towards the United States. 38 In the spring of 1924, MacDonald told Herriot: We must assure our well-being, but we will work also to resolve the great moral problems of the peace of the world. Lets us therefore set- tle first the question of the Dawes Report; then we will go on to that of inter-Allied debts, then to the problem of security, and then we will try to remove from Europe the risks of war which threaten it.
eBook - PDFHistorical Phases of the New York Herald-Tribune
Facets of a Multiple Pulitzer Prize-Winning Newspaper
- Heinz-Dietrich Fischer(Author)
- 2022(Publication Date)
- LIT Verlag(Publisher)
27 Foreign Coverage 29 GERMANY’S WORLD WAR ONE REPARATIONS DEBTS by Leland Stowe, New York Herald-Tribune In the years following the First World War, issues of debt repayment and reparations between the Allies and the now defeated Germany dominated the agenda. The so-called Dawes Plan, chaired by Charles G. Dawes, was a plan in 1924 that successfully resolved the issue of World War I reparations that Germany had to pay. It was an interim measure and proved unworkable. So five years later a new step was taken to solve the problem. A new committee, which had been appointed by the Allied Reparati- ons Committee, met in the first half of 1929 and was chaired by Owen D. Young. Among the many journalists covering the event, was Leland Stowe of the New York Herald-Tribune, based in Paris. When his many articles about the conference came to the attention of the 1930 Pulitzer Prize jurors they declared Stowe winner in the correspondence award category „for a series of articles covering the conferences of reparations and the establishment of the International Bank.“ Leland Stowe was born on November 10, 1899, in Southbury, Connecticut. He was awarded an A.B. degree in 1921 from Wesleyan University, Connecticut. Sto- we started his journalistic career as a reporter on the Worcester Telegram from 1921 to 1922 and then worked in the same capacity for the New York Herald the following two years. Between 1924 and 1926 Stowe worked as a foreign editor with the Pathe News, and thereafter became a Paris correspondent for the New York Herald-Tribune, a position which he held until the mid-1930s. From 1927 Stowe also served as a reporter for the League of Nations councils and assemblies. On May 15, 1929, a chief editor of his newspaper wrote the following commendation: „We are very much thrilled by your remarkable beat in the matter of the Internatio- nal Bank. I do not know of a more substantial or important news beat in recent times, and I want to congratulate you .
eBook - PDF- Alan Cassels(Author)
- 2015(Publication Date)
- Princeton University Press(Publisher)
Among other attractions, the proposal hinted at American investment in Europe and lenient war debt settlements. Ultimately Germany and France, both somewhat chastened, accepted an international inves- tigation, and on November 30, 1923 two committees were τ Royal Institute of International Affairs, Survey 1924, pp. 288-90. 148 MUSSOLINI AND GERMAN NATIONALISM appointed. Their recommendations were to become the basis of the Dawes Plan, named after General Charles Dawes, the American banker who was chairman of the first committee. 8 Despite Mussolini's frequent assertions of the link be- tween German reparations and American war debt, Italy did not join actively in the campaign to bring the United States into the reparations picture. Before agreeing to par- ticipate in the international investigation of Germany's economy, Italy hedged and called, albeit in vain, for an Al- lied understanding beforehand. 9 What Italy feared was plain enough: America's entry and British reentry onto the scene would diminish what little influence Italy enjoyed, and thereby would increase the chance of an undesirable repara- tions settlement to Italy. 10 For Mussolini there was another and more personal reason for disliking the turn of events. His persistent ambition in the Ruhr crisis had been to win esteem for Fascist Italy by forcing his own mediation services on the protagonists. He had tried at first alone and then in conjunction with Britain. Now the establishment of the Dawes committees was mediation imposed by the Anglo- Americans, with America playing the part Mussolini coveted. But he blamed the British for this; they had spurned him in favor of the United States. The Duce awaited an oppor- tunity to give vent to his wounded feelings. When London proposed Anglo-Italian collaboration to prevent the auto- matic reelection of a Frenchman as president of the Rep- arations Commission, he contemptuously rejected the over- ture as a typical British trick to embroil Italy with France.
eBook - PDFTwentieth-Century Europe
1900 to the Present
- Michael D. Richards, Paul R. Waibel(Authors)
- 2023(Publication Date)
- Wiley-Blackwell(Publisher)
A new mark, the Rentenmark, was issued at the rate of one new mark for one trillion of the old inflated marks. Soon the mark stabilized at its old prewar value of 4.2 marks to the dollar. 2 “Fulfillment” was based on the assumption that the surest route to revising the Versailles Treaty was to avoid open confrontation and work with existing possibilities. Positive results were not long in coming. In 1924, the Dawes Plan provided a realistic scale for the payment of reparations and a foreign loan (supplied mainly by American banks) of 800 million gold marks. Together with the end of the Ruhr occupation, these measures enabled the German econ- omy to recover rapidly. By 1928, German industrial production was second only to the United States, and unemployment was reduced to 650,000. In contrast to its early years of strife and turmoil, the Weimar Republic passed the last half of the decade in relative tranquility. Following his attempted putsch, Hitler spent his time in prison writ- ing his political creed, Mein Kampf (1925). After his release, he rebuilt the Nazi Party to make it stronger organizationally and more intensely loyal to him personally. Yet, Hitler could not make much headway in the late 1920s. He was the best-known figure of the extreme right but not a significant politician until he cooperated 2 The fact that much of the positive diplomacy of the 1920s was the result of the personal relationship between Stresemann and Briand made Stresemann’s death all the more tragic. Recovery and Prosperity, 1919–1929 113 with the German National People’s Party (DNVP) in the 1929 referendum on the Young Plan for the reorganization of reparations. This move brought him into national prominence. The DNVP, based on the hostility of the prominent aristocratic landowners and some industrialists toward the Weimar Republic, seemed a much more substantial threat to the Republic than any group on the extreme right.
eBook - ePub- Fanny Coulomb(Author)
- 2004(Publication Date)
- Taylor & Francis(Publisher)
In the 1930s, the study of international economic relations developed a great deal. The reasons for these new theoretical developments lie in a question connected to the war: the reparations and the inter-Allies war debts. The debate on this issue was very lively, not only in France but also in England and the United States.The French disagreements on the question of the reparations: the example of Charles Rist
After the First World War, the French economy was very much weakened and the idea of reparations paid by Germany was then dominant. ‘Germany will pay’: this political, but also moral, conception was questioned by Keynes, as well as the issue of the inter-allies debts (like several liberal economists, he wished for a moratium of these, on the basis of rigorous economic argumentation). In 1921, the French economist Charles Rist underlined the concrete difficulties there were in implementing the measures which were provided for in the Treaty of Versailles. And indeed, German payments to France were very low in the first post-war years, and in 1924, the Dawes Plan decided to suspend them until the recovery of the German financial situation. When revealing the reparations’ pernicious effects, Charles Rist was influenced by the economic principles of liberalism and solidarity expounded in Keynes’ The Economic Consequences of the Peace (1919). However, he rejected the British economist’s pessimistic forecasts as to the non-payment of the reparations, and attempted to look for the practical means which would enable Germany to pay. Rist’s analysis was different from another more orthodox liberal view, defended by Jacques Rueff.After the First World War, numerous French economists (notably Biard d’Aunet, Blondel and André Tardieu) denounced the aggressive military culture of the German people, and judged that the definitive dismantling of Germany was a condition of world peace. This view was sometimes contested; for example, Yves Guyot (1921), editor of the Journal des économistes, recommended a moderation of the conquerors’ requirements, so as not to favour the spirit of revenge of the vanquished. However, he was favourable to the dismantling of the German and Austro-Hungarian empires. Charles Gide (1919), another French economist, criticized the suppression of the German colonies, because it hindered its industrial reconstruction and its capacity to conquer new markets in South America and Asia. Charles Rist (1921) attempted to demonstrate the lack of economic justification for some excessive French requirements regarding reparations. On this point, he criticized the inaccuracy of the Treaty of Versailles, notably in regard to the exact amount of the reparations. The ideas expressed by Keynes in The Economic Consequences of Peace
eBook - ePubTwentieth-Century Europe
1900 to the Present
- Michael D. Richards, Paul R. Waibel(Authors)
- 2023(Publication Date)
- Wiley-Blackwell(Publisher)
The middle class, whose financial base was wiped out, was the hardest hit. The American author Pearl S. Buck (1892–1973) was in Germany in 1923. She wrote later of how the German people were dazed, confused, wondering how such a thing could happen. “Yet they had lost their self‐assurance,” she remembered, “their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency” (Public Broadcasting System 2013). How could such a thing happen? Many began turning to the rightist parties for an explanation and a solution. Finally, the government was reorganized under the leadership of Gustav Stresemann from the German People's Party (DVP). Stresemann, who served as foreign minister from 1923 until his death in 1929, carried through a policy of “fulfillment” concerning reparations. A new mark, the Rentenmark, was issued at the rate of one new mark for one trillion of the old inflated marks. Soon the mark stabilized at its old prewar value of 4.2 marks to the dollar. 2 “Fulfillment” was based on the assumption that the surest route to revising the Versailles Treaty was to avoid open confrontation and work with existing possibilities. Positive results were not long in coming. In 1924, the Dawes Plan provided a realistic scale for the payment of reparations and a foreign loan (supplied mainly by American banks) of 800 million gold marks. Together with the end of the Ruhr occupation, these measures enabled the German economy to recover rapidly. By 1928, German industrial production was second only to the United States, and unemployment was reduced to 650,000. In contrast to its early years of strife and turmoil, the Weimar Republic passed the last half of the decade in relative tranquility. Following his attempted putsch, Hitler spent his time in prison writing his political creed, Mein Kampf (1925)
eBook - PDFPaying for Hitler's War
The Consequences of Nazi Hegemony for Europe
- Jonas Scherner, Eugene N. White(Authors)
- 2016(Publication Date)
- Cambridge University Press(Publisher)
section i GERMANY’S WARTIME DILEMMA 1 Germany’s Economic War Aims and the Expectation of Victory, 1918 Carsten Burhop The long shadow of World War I had a decisive impact on German polit- ical behavior during the Weimar Republic and the Third Reich even if there is no simple chain of causality running from the Treaty of Versailles to Hitler. 1 Some historians consider the period between the outbreak of World War I in 1914 and the end of World War II in 1945 as a twentieth century Thirty Years’ War. From this perspective, the Treaty of Versailles was only one step in a prolonged conflict. But it was an important step because the treaty gave rise to revisionist claims by Germany. A sub- stantial part of the German population wanted to revise at least some provisions of the treaty: the imposition of reparation payments, territo- rial losses, and restrictions on the German military. 2 “The bitterness of most German officers and soldiers at their defeat was intensified by the fact that, until July 1918 their armies had been unbeaten, and that made the sudden collapse at home appear all the more inexplicable and sinis- ter,” writes Anthony Beevor. “German nationalists dreamed of the day when the humiliation of the Versailles Diktat could be reversed.” 3 Already during the 1920s, the Western powers acknowledged treaty revisions would have to be made. 4 The first revision came in 1924 with the Dawes Plan to reschedule Germany’s reparation payments. Further mea- sures followed: Germany became a member of the League of Nations in 1926; the Inter-Allied Commission of Military Control left Berlin in 1927; 1 Eberhard Kolb, Der Frieden von Versailles (Munich, 2005), 107. 2 Ibid., 91–92. 3 Anthony Beevor, The Second World War (London, 2012), 2. 4 Richard J. Evans, The Third Reich in Power (London, 2006), 615. 19
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